Are You Ready to own your Own Business?

Summary

Gordon Bizar hosts a webinar advising entrepreneurs on determining their readiness to own a business. He provides an 11-question self-assessment covering industry experience, financial preparedness, leadership skills, time commitment, and other areas. Bizar then reviews 6 critical concerns including financial analysis, legal due diligence, market research, operational review, growth potential, and value addition. He concludes by highlighting 6 essential skill sets for successfully running an acquired business: leadership, financial management, marketing/sales, operations, adaptability/problem-solving, and industry knowledge.

Takeaways

• 😀 You must evaluate if you have the experience and knowledge to succeed in the industry you want to enter
• 😊 Make sure you understand the financial commitment and risks of business ownership
• 👍 Analyze potential legal issues and ensure regulatory compliance before acquiring a business
• 🔍 Research the market, competition, industry trends and outlook thoroughly
• ⚙️ Review operational processes, systems, equipment and workforce quality
• 🚀 Consider the growth potential and how you will enhance the business’ value
• 🤔 Identify if your skills and capabilities align with the business’ needs
• 😎 Develop leadership, financial, marketing, operational and problem-solving skills
• 📈 Understand how to read financial statements to make informed decisions
• 💡 Be open to advice from mentors and build industry-specific knowledge

Q & A

What are some key things to assess when considering acquiring a business?

Some key things to assess are your industry knowledge and experience, financial preparedness, leadership and management skills, ability to handle uncertainty and stress, problem-solving skills, vision and goals alignment with the business, time commitment required, and your exit strategy.

What are some hidden liabilities to look out for when analyzing a business's finances?

Some hidden liabilities to look out for are unfunded or underfunded pension plans, undisclosed debts, pending lawsuits or legal disputes, and issues with compliance to regulations.

Why is it important to understand financial statements when owning a business?

It's important to understand financial statements to effectively analyze your revenue streams, expenses, and profitability to make informed business decisions. The statements provide critical data to manage cash flow, ensure profitability, and determine areas for improvement.

What causes many business owners to hit a plateau in growth?

Many business owners hit a plateau in growth because they struggle to delegate tasks and responsibilities. They continue trying to do too many things themselves rather than building teams and management systems.

How can you determine if a business's processes are becoming less efficient?

Key performance indicators (KPIs) can track processes from month-to-month to detect inefficiencies. Shifts in the metrics will stand out compared to baseline goals.

Why are marketing and sales skills important for a small business owner?

Marketing and sales are critical for small businesses to drive revenue, especially when there isn't an established sales team in place. The owner often needs to directly oversee finding new customers and closing sales.

What are some key operational expertise skills needed?

Some key operational expertise skills are supply chain management, inventory control, quality assurance, process optimization, and being able to innovate solutions to tackle issues.

Why is adaptability important for business owners?

Adaptability is key because the business environment changes rapidly. Being open to new ideas, adapting to market changes, making decisions under pressure, and finding creative solutions are essential.

Should you acquire a business in an industry you have no experience in?

It's better to gain some initial industry-specific experience first rather than take on the steep learning curve of unfamiliar areas on your own in a new business.

What should you add to a business to pay down debt faster?

Value-added offerings that boost earnings, cash flow, and growth rate allow debt to be paid down quicker while still having surplus cash for reinvesting and profit.