How to take over, and make a small business your own

Owning a small business can be very rewarding when it is a successful business.It can also be a very emotionally and financially challenging when it is not successful.As compared to a fixed salary or hourly wage, there are no limits to the amount of profits you can make from your small business.On the other hand, you can lose money instead of at least having the security of making a fixed income.

There are several ways to own a small business:
- Start a small business from scratch slowly, using your own capital
- Start the business quickly, using borrowed capital from a bank or from investors
- Acquire an existing business using your own or borrowed capital.
- Combine forces between your business and somebody else's business.

A business that has a proven track record, an existing clientele, and good prospects for the future is an attractive alternative to starting from scratch.You can hit the ground running by taking over where your predecessor left off, and immediately enjoy the benefits of owning a business without having to suffer through the pain of starting the business from the ground up.Instead, you need to go through a similar process to buying a home.You need to find the business that may be for sale or has a possibility to be acquired, do some research on it, decide if it is right for you, make on offer, figure out how you are going to pay for it, acquire the funds to purchase the business, do the paper work, learn how to run the business, and make whatever changes seem right to you as a business owner, including business procedure and employees.

One doesn't usually find a "for sale" sign on a small business, or a listing in the classifieds.Nevertheless, through your personal and business connections, friendships, or family members, you may get word that a business is for sale.You may also be interested in a particular business, and may approach the business owner about it.

Once you've determined that you are interested in this business, you need to determine the current net worth of the business, evaluate its future prospects, and its past track record.Ask to see the accounting books for a period of time for which you feel comfortable.Get answers to important questions.For instance, over the past couple of years, are sales increasing or decreasing.Are there expenses that could be eliminated under your ownership?Are there untapped markets that could be ventured into under your leadership?What other things could be done to improve the profitability of the business?For example, is the advertising that is currently in use the most effective possible?Is the location of the store the best for the type of customers that shop here?Maybe you are happy with the performance and don't want to change anything.

Determine the worth of the business.Ask for, or prepare a balance sheet of the business, or hire an accountant or CPA to do this for you.This is a similar process that investors and analysts go through when deciding whether to buy, sell or rate stocks in a company.The balance sheet basically shows the worth of the business by showing its earnings and assets.

Once you and the seller of the business agree on a price, you need to pay for the business.The research that you have done should be used to present to your bank or investors.If necessary, hire a lawyer to help with the legal paperwork, and ownership transfer paperwork.

Finally, when you are the owner, be careful not to go overboard with changes right away.It is natural to want to do things your own way, but you bought the business for a reason, because it was already established and profitable.At the same time, you will want to look for things you can improve, and make these changes as time and money allow.