24 Aug Tips for Buying an Essential Business
“With the idea that essential businesses can be recession-proof and even boom during a public crisis, buying one is becoming a more attractive prospect,” says franchise expert Chris Buitron in a recent Milwaukee Community Journal article.
The thought piece, “4 Factors To Consider Before Buying An Essential Business In COVID Times,” discusses a rising interest among buyers in essential businesses. The COVID-19 pandemic has many buyers rethinking what type of business they might want to own, often turning to those deemed essential such as grocery, delivery, cleaning, and home services.
When looking into buying an essential business, Buitron recommends you consider the following:
- Focus on successful types of essential businesses, those that are more likely to succeed even when economic conditions are poor.
- Consider franchise opportunities which offer training and support.
- Be able to decipher between a bargain and a bad investment.
- Make sure that owning a business is right for you and that you are right for the business.
Focus on successful types of essential businesses. Among the essential businesses that have the potential to succeed even during difficult economic times are: delivery services, grocery stores, convenience stores, e-commerce, gas stations, cleaning services, liquor stores, auto repair, lawn care, pest control, mailing/shipping services, and contracting. “The pandemic may be with us for a while,” Buitron says. “People will be home more often, and businesses that can service their needs while home will gain customers.”
Consider franchises as ownership opportunities. While some franchises are struggling during the pandemic, others are in a better position, Buitron says. “For franchises in general, much of the industry will be entering a buyer’s market, and those with the means will find some good opportunities,” he says. “People need jobs, and franchises annually employ 9 million people in the U.S. One benefit of buying a franchise is having an organizational and management team already in place to train you and help guide you. Reach out to other franchise owners to get a sense of the company’s commitment and support.”
Know a bargain vs. a bad investment. A relatively low sale price tempts some people into making a poor buying decision on a business. Buitron says it’s important to pore over the business’ financial numbers that it recorded before the pandemic and do all the research possible – especially of the market where the business is located – to determine if it was on a growth track and what the competition is like. “Two questions you need to ask yourself as a potential buyer of an essential business are: What can you bring new to the business to make it more successful, and why was or wasn’t it profitable?” he says.
Be sure you’re up to owning a business. “There are no guarantees with owning an essential business,” Buitron says. “The pandemic has put a spotlight on their importance, but they take lots of work and organizational skills to run. If you are someone who can’t deal well with uncertainty, buying a business any time, let alone during the most uncertain time in our history, isn’t the right choice. Buying a business and committing to it requires thorough research, a passion for the business, a solid financial foundation and a leap of faith.”
If you’re looking for the right business to buy, we can help navigate the complexities of this year’s unusual market and business environment. Check out our listings here and contact us for more information!