Idea of Buying a Service Business
Buying a services business is different than buying any other business. A service business is an enterprise established and maintained for the purpose of providing services to private and commercial customers. Many service enterprises require minimal start-up capital as compared to wholesale or retail businesses which require large amounts of money. Service operators can afford to work from home, thereby avoiding costly overheads like rent, salaries and payment for amenities like water, gas or electricity.
Most service-oriented businesses tend to be local. If you check out the local listings, you would come across many businesses that fall into the service category. These services include, book-keeping, house painting, child minder services, lawn care etc. Other service areas which are more professional and require a greater amount of investment include attorneys, doctors, chauffeur driver agencies, car rentals and retirement homes.
The world has moved from becoming an industrialized economy to a more service-related economy. This may not be great news in terms of employment and for people who are more comfortable with earning a paycheck. However, it is good news for the entrepreneur or business buyer because it is easy for him to buy a business, be his own boss and set his own work hours.
Furthermore, the service business industry is a booming one and provides an individual the chance to acquire a profitable business without the need to develop specific skill sets or acquire professional qualifications. Service businesses offer generalized and straight forward forms of operation as compared to manufacturing businesses where experience is compulsory.
It is important that you take out time to determine the exclusivity of the service that you are going to provide. Do you have competition? What can be done to stay ahead of the pack as an assurance that you take a sizable chunk out of the customer cake? You will need to work closely with the seller to get the best out of your newly acquired business. His involvement is vital, if you want to hit the ground running and not crash or burn out.
Furthermore, discuss the possibility of adding supplementary products or services and selling to repeat customers. You should also consider if the business has the capacity to grow or expand in the long-term. Realize that for you to accomplish this; you need a business that plays more to your strengths and not your weaknesses. So if you have a bubbly personality, love the outdoors and remain keen on meeting people, do not buy a service business that leaves you shackled behind a desk.
Where the concentration of your customers comes from is important as well. Some of these businesses align more with other business owners and not customers. You would need an assurance in all agreements that you sign that this relationship would continue even when the business changes hands. A business transaction must be beneficial to you and not be counter productive.
Service businesses enjoy better profit margins when you compare them to other businesses.
Moreover, they offer a viable platform for you to build a business and grow in the future. The day-to-day running expenses are minimal, once you are well-prepared for the exciting journey ahead and dig your teeth into a business that you are passionate about.