Most of us have been conditioned to think there is always a cash requirement to buy a business. Sellers are equally conditioned to ask for cash because they feel the understandable need for a tangible payment in exchange for turning over their business. That’s why you will always find a down payment figure attached to the announcement of a business for sale. Unfortunately, that monetary figure scares many potential buyers. The fact is, virtually any business is available without a cash-down payment of any kind if you approach the seller in the appropriate way. But first, you need to narrow down your choices and determine what business suits you best.
Question: What’s the best way to decide on the business I’d like to buy or start?
Answer: Obviously, if you already have a “burning yearning” to enter a particular field, that’s the one you should pursue. It is just a matter of studying the market and identifying current trends.
Are the Beanie Babies still a hot item? What will be the next craze? You need to find out what are the present needs of consumers. They are the ones who are going to use your products or services. Our program reports are provided to help you choose your niche. If you’re still undecided, we can show you ways to accelerate your search and make it a lot more fruitful. There are so many avenues to take and we will guide you to the best one. No advice can be given about what kind of company you should start or acquire. With any business you choose, you will be able to enter it without using your own cash. In fact, at least 5,000 good, solid businesses with annual sales of over $400,000 are sold each year to people who use none, or little, of their own money. Sometime soon, one of those businesses could be yours.
Question: You were talking about “studying the market and identifying the current trends”; what are the first steps toward accomplishing that?
Answer: It is necessary to approach this process step by step. First, a market research is necessary to determine the need of your potential customers. What is a market research? Well, it is a cost-effective way of finding out what people believe, think, want, need, or do. It is information that cannot usually be obtained from any other source. Industry, commerce, and government use research to help them produce goods, services, and policies matching the public’s needs.
Market and social research is used, amongst other things, to test new products (everything from foods, to magazines, to cars) during their development stages:
1) to assess customer needs and reaction to a company’s and its competitors’ products
2) to learn about and monitor customer satisfaction with shops, holiday destinations, products, etc.
Question: How is market research being done?
Answer: There are two main types of data quantitative, and qualitative. Quantitative research provides numerical data. At the completion of a quantitative project it is possible to say (for example) what proportion or percentage of the population falls into different groups – those that want something, those that would be likely to buy something, etc. The essence of quantitative research is that every respondent is asked the same series of questions.
Qualitative research is the way in which typical or relevant people’s attitudes and beliefs can be explored, and ideas can be generated. It can be used for everything from testing reaction to a potential new advertising campaign, to exploring staff attitudes to a new management structure or procedure.
Over the years I’ve learned that much more goes into market research than asking my existing or prospective clients/customers targeted questions. Here are a few lessons learned that will take you to examples of each point in action.
1) Identify the market opportunity of your product or service before committing to your home business idea. Ask “what’s the potential?” before investing in the business.
2) Collect the demographics of your market before and while your business is up and running. The more facts you can gather about who wants/needs what you have, the easier it will be to promote and advertise your service or product to them. With this information, you’ll take a wiser decision regarding purchasing the desired business.
3) Scout out the competition. Carve your niche in the business community by exploring what your competition has and doesn’t have, then fill in the holes.
4) Track trends. Awareness of what’s happening around the bend in your industry and among your prospects will keep your business current.
5) Survey the market. To better understand what makes your market tick, ask the people involved in your industry.
With market research, you’ll be able to determine what industry you are interested in and how to approach with simplicity and ease what will be the ideal business to purchase. The more information you gather, the better it is for the future success of your business.
Question: All this is great. Now I have accumulated a mountain of pages of information about the market. What’s next?
Answer: You need to analyze your market. You need to find out if the business will succeed. Find out if the business failed because of mismanagement or a lack of research. You can’t sell a product if you don’t know how to reach your potential customers. Every buyer should have some measurement of what the future will offer. This includes not only the possibility of maintaining the same volume of sales as in the past, but also the opportunity to increase sales and profits.
The buyer must have some idea of what he is acquiring besides the physical assets of the business. He is, in fact, investing in or obligating himself to the continued operation of the business.The true value to him lies in the ability of the business to generate sales at least equal to its current position in the market.