About buying a service business
You have decided to buy a business - but what type best suits you?
There are 4 main types:
Each has its own unique characteristics that may or may not suit your skills and strengths. In this article we look at buying a services business.
Service Business for Sale opportunities are a popular, high growth area covering from the mowing of lawns to the practicing of law. It's about working with people and providing them with skills or expertise. It maybe; providing cleaning services, performing dentistry, wiring a house, or doing consultancy work to mention but a few.
Usually services businesses will focus on one of two categories;
(1) the domestic market, or
(2) the business sector.
Service based businesses employ a range of skills from the professional to the semi-skilled, and can be operated out of a van, home, or an upmarket city office.
The service industry relies on the selling of time and skills. You have to like working with people and providing service. It pays to be good with staff, be able to train, motivate and manage people. You will need to be efficient at managing resources and at maximising chargeable time - this will be key to your profitability. It also pays to be professional and good at what you do.
Most service businesses don't need vast amounts of cash to get going, as they don't usually require extensive plant or large buildings. They can be sized to suit, from the owner/operator to the large corporate, and are generally good providers of cash flow. Some areas tend to be more competitive, especially at the lower skilled end of the domestic market where price rather than service can become the focus. Good service businesses are well sought after, often fetching good prices - unfortunately most of this can be in goodwill (a risk you should seek to minimise). There are a growing number of good service businesses now being franchised.
When looking to buy a Service Business, look for good systems and a stable customer base. Determine if the business in a growth or decline phase? What's the market like in the area you intend to operate? If the business is highly profitable, then it is also likely the vendor will be asking high goodwill. If this is the case, then you may wish to make the goodwill subject to the business' ongoing performance.
By Richard O'Brien - nzbizbuysell
When buying a service business for sale opportunity always seek professional advice.
· Manufacturing Businesses for Sale
· Distribution Businesses for Sale
· Retail Businesses for Sale
· Service Businesses for Sale
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