What’s a Good Business to Buy Right Now?
This is my most often asked question, other than "Whats it worth?". The question implies that some businesses are worth buying and others are not. While its difficult to argue with the basic premise, the reality is that almost any business can be seen as either good or bad, depending on perspective, circumstance and presentation. How much you pay for it, what you expect to get out of it and what you intend to do with it are crucial.
The other factor raised is that of timing. Its always great to be in front of the technology wave, or to get the jump on the market, but you are usually better advised to plan for a reasonable return over a reasonable timeframe than to "invest" in a get rich quick scheme.
If you expect to buy a business for $100,000 that will run by itself and pay you as much as your corporate salary, you are probably going to be disappointed. If you are looking to invest $2 million, want to be a hands on manager and would be happy with a 20% return after salary, you may well be pleasantly surprised.
If you plan to restructure a business, and/or integrate it with an existing operation, your investment strategy may look different to some-one else. Desirability and value will be measured very differently by individual buyers, and what is perfect for one, may not get a second look from another. There is no way yet found to accurately measure human nature, which brings us to how well the business is marketed and presented to buyers.
Yes, good businesses are always in demand and they do sell reasonably quickly. One of the features of the current market is the strong level of interest in the $1m - $2m price range. There are many genuine buyers with access to funds who are ready to make decisions and take positive action.
Regardless of the size of the business, the market is positive and growing.
I subscribe to the theory that a good business to buy is the one you can afford and that you will enjoy working in..... and if you stop enjoying it, give me a call and I'll sell it for you!
Peter Nola is an Auckland based business broker, author and YouTuber with 20 years’ experience and over $100m of businesses sold, helping New Zealand business owners to buy and sell businesses.
