Wednesday, October 5, 2011

The Best Business Education You Can Get - And It's Free

I'm not talking about SCORE (Service Corps of Retired Executives). While you can get good business information from these retired executives there is a much better way. This article will teach you how to get current business owners to spill their guts to you about the most intimate secrets of their business.

Normally small business owners are pretty closed mouthed about their business and won't make the time to talk about their business to a stranger but there is one time when the exact opposite is true.

That time is when the owner is selling his or her business.

And that is a great way to learn about various businesses and explore what you might like in the way of a business for yourself.

But is does take practice and time to sift the truth out of the sales pitch the owner is making. Here is a plan you can follow to accomplish this educational goal without getting sidetracked by bad information. Expect to invest a few weeks at this process before you get good enough at it to really get an accurate picture of the businesses you are "interviewing."

Step 1: Get the classified section of you Sunday newspaper. The section you are interesed in is "Business Opportunities" or "Businesses for Sale."

Step 2: Read all the ads and circle the ones that do not look they were put in by a broker. At this point, it is much better to talk with the owners directly rather than have the complexity of a business broker in the middle of it. (Once you get educated, you can use a business broker if you are truly shopping for a specific type of business to buy.)

Step 3: Call every business owner and express interest in learning more about the business for potential puchase. Take notes as to what the person says and when the initial pitch is done, set up an appointment to talk more and to look over the business.

Step 4: Go to your appointments, examine the business, look at the books, ask to see the tax records, see what kind of terms the business owner is willing to offer, ask about day to day operations, employees, etc. In other words ask the owner every question you can think of to both prove the earning claims and to give you a good feel for how the business actually works. (And if you really are interested in a particular business, ask if you can work in the store for a day or two to get a good feel for things before making a purchase decision.) Build a checklist of questions you want to ask and bring it with you so you don't forget to ask anything. And revise the checklist as many times as necessary to add/modify questions. You will eventually end up with your very own business evaluation worksheet.

Step 5: Repeat every week until you develop a sense for what the sellers are saying and not saying about their businesses.

After talking with a few business owners, you will find that most of what they tell you is a stretch of the truth or it is pretty accurate but the numbers just do not make sense for the person purchasing a business. You will also learn a lot about how real people run real businesses. But most of all, you will get an amazing education you just can't get in any other way and after this exercise, you should be able to size up any business and its true value in minutes.

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