Is Now the Right Time to Buy a Business?

By Mike Handelsman of Entrepreneur.com

Over the past year, historically high levels of unemployment have left record numbers of highly skilled individuals looking for work. Many are asking themselves if now could be the right time to pursue their dream of buying a business and becoming their own boss.

With corporate jobs less secure and available now than perhaps at any time in recent history, buying a small business could be an excellent way for many of these unemployed individuals to take control of their own destiny and success. Tough economic times have created an abundance of distressed companies in the business-for-sale marketplace, meaning business buyers currently have access to great bargains. However, anyone thinking of becoming a business owner must undertake considerable research and self-evaluation before taking steps to turn the idea of buying into a reality.

Anyone thinking of purchasing a business should keep the following points in mind before going further:

Analyze Your Strengths, Weaknesses and Lifestyle Needs
While the thought of running a business is exciting and causes many would-be entrepreneurs to want to buy as quickly as possible, it's essential to properly evaluate what type of business suits you. When buyers choose the wrong businesses, their entrepreneurial dreams can quickly turn into stressful burdens.

For this reason, you should do a careful analysis of your strengths, weaknesses and lifestyle needs before diving into the buying process. Here are five critical questions to ask yourself before deciding what type of business is right for you, or if you are even cut out to be a business owner:

• Do I have hobbies or interests that I want to make a part of my daily job? Business buyers often ignore their interests and look for a business based solely on what they think will be the most profitable, which can have negative consequences. Money-making potential is important and should be considered, but if you have no interest in what you do, it probably won't make your life any better.
• What are my strengths and skills? Business buyers should also consider their personal strengths before looking for businesses to purchase. Maybe you're a skilled writer and communicator, excel at teaching concepts to others or have a knack for technology. If you buy a business that allows you to put your strengths to work, it will have a much better chance of succeeding.
• Are there any particular times I absolutely can't or don't want to work? If you buy a business that requires a schedule that will complicate your life, the business you thought would make life better will likely do just the opposite. If you're considering a specific type of business, talk with current owners of similar businesses to get a sense of what their schedules are like. Keep in mind that owning your own business does not necessarily mean more free time; it can mean just the opposite. Be prepared to handle the long hours that often come with running a business.
• Am I comfortable managing people? Just because you want to be a business owner doesn't mean you are -- or need to be -- a "grade A" manager of people. However, if you buy a business that won't involve a manager on staff to do it for you, you'd better make sure you're comfortable with the situation before committing. For example, should a situation occur that is hurting the success of the business, would you feel comfortable confronting employees who were at fault, or would you be more likely to pretend it's not happening?
• What size business do I want? Small businesses can range from zero to 100 employees, which means that there's no cut-and-dried small-business owner experience. An owner of a five-person company will likely have a very different role and lifestyle than an owner of a 50-person company.