Why pick the ugly duckling when buying a business
Why you shouldn’t overlook the ugly duckling
If you’re looking for a business to buy, it’s easy to be drawn to the highly profitable and very well-established businesses. But chances are they will be too expensive and sometimes too, if a business is performing exceptionally well and it’s for up for sale, the only way may be down.
They say that to get the best value in residential property, you should buy the worst house on the best street. It’s the one that with a bit of TLC will increase in value the most.
We recommend a similar approach when buying a business. Try to look past the shiny, picture-perfect businesses and look deeper into the ugly ducklings. What you are looking for are opportunities for improvement. What can you bring to improve the performance of the business?
Here are four easy ways to boost a struggling business:
Often struggling businesses are not marketing enough, or their marketing is ineffective. Look for low-cost, high impact options. It could be as simple as updating the website, starting a social media campaign or targeting advertising at a specific market segment.
Offer something new
A new offering can not only increase sales from existing customers, it can also bring in new customers. Look at the likes of the hardware stores that now offer coffee and cafes. Extending opening hours or getting a liquor licence could also breathe new life into a tired café or restaurant.
Streamline business process and systems
In effective systems can drive businesses into the ground very quickly. With fresh eyes, it’s easier to see where efficiencies can be made. And don’t forget to ask the staff. They will know what is working and what’s not, and they may have ideas for improvements.
Sometimes, it’s as simple providing some enthusiasm. If the previous owner had lost interest or had competing priorities, you just need to revigorate the staff and business to see improvements – energy and enthusiasm are catching. Just a little bit more attention paid to accounting, management, customer service, even the look of a business, can make big differences.
When looking to buy a business, remember, look for opportunity. Breathing life into a struggling business is hugely rewarding personally and financially, and will place you in a very good position to make a great return on your investment when you decide to move on.
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