The main reason that some people take opportunities when they arise, and others do not, is that some people are ready.
They have their business plan ready and all they need to do is take advantage of the opportunities.
Where can you find the right business plan?
If your business is based in the United States - click here
If your business is based in the U.K. - click here
Ideas To Action.
Part 4 - Evaluating a Potential Opportunity
Before you start any evaluation of any business opportunity you must ask for a disclosure statement (or whatever the local equivalent is called).
A disclosure statement is a document that contains everything there is to know about the business opportunity and the seller. It includes details of financial strength, how many operating units there are, and exactly what you are going to be required to pay in total so there are no hidden fees.
The purpose of the disclosure statement is to protect the licensee as well as the licensor and to eliminate some unscrupulous licensors.
Most countries and states that have disclosure requirements parallel the U.S. federal standards of information that must be supplied to the buyer. In addition, disclosure statements often include information stating that the buyer has three to seven days referred to as a "cooling off" period so the purchaser / investor can reconsider the subject by themselves with no pressure from the seller.
Evaluating a Potential Business Opportunity
Should you find a business opportunity that you would like to buy, you will need to consider a number of points before deciding whether to purchase it.
You will need to take a good, close look at the business and answer the following questions:
- Why does the current owner want to sell the business and if the business is in decline, will you be able to save it and make it successful?
- Is the business now, or has it ever been, under investigation by any government agency? Is the business currently involved in a lawsuit, or has it ever been involved in one? If so, what is the status or result?
- Can you see verified copies of all of the current contracts and details of all the sales in the last few months? How many customers does the business serve on a regular basis?
- What percentage of the businesses invoices are past due? How much does the business write off each year for bad debts?
- Does any single customer account for a large portion of the sales volume? If so, would the business be able to survive without this customer? Remember, the larger the customer base is, the more easily you will be able to survive the loss of any customers.
- Does the business have exclusive rights to market any particular products or services? If so, how has it obtained this exclusively? Do you have written proof that the current business owner can transfer this exclusivity to you?
- Does the business hold patents for any of its products? Which ones? What percentage of gross sales do they represent? Would the sale of the business include the sale of any patents?
- What direct competition does the business face? Why does the business compete successfully?
- What is the business' current inventory worth? Will you be able to use any of this inventory, or is it inconsistent with your intended product line?
- How many employees does the business have? What positions do they hold? Does the business experience high employee turnover? If so, why?
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A Great Business did not just happen - It was planned that way.