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Sometimes, an opportunity comes at you. Your business is rocking along, and then, out of nowhere, you get the chance to jump start it to the next level.
Example: Dave and Jim were buddies in high school and both were into fitness. They spent hours in the local gym working out and playing sports. When they graduated, they talked with the owner of the local weight training center about how to open a gym. Their idea was not to compete with weight training but to have an up-scale fitness center--offering weight reduction programs, healthy living, with a smoothie bar with vitamins and supplements. To their surprise, the owner proposed that Dave and Jim take over the weight training center and turn it into what they had in mind The owner offered to structure a loan to cover the payout over several years--and he offered to help them with advice during the transition. Dave and Jim were suddenly in business and on their way.
Example: Bill runs a landscaping service. He cuts grass, trims shrubbery, helps homeowners put plants in their yards. He parks his truck and trailer behind his own house, and his garage is full of equipment and materials. Inside, he turned part of a bedroom into a small office setup. To grow, his wife reminded him, he needed to get the business out of the house, out of the garage, and out of the yard. To expand, Bill looked around. He found a small garden center owned by an elderly man who was willing to enter into a lease-purchase agreement, selling the place to Bill. After carefully projecting the numbers, Bill jumped at the chance. The elderly man was looking for an income for his declining years, so they agreed to a payout that Bill could afford over the next 15 years. If Bill defaulted, the elderly man could repossess the place and sell it again. Today, Bill has expanded his landscaping services into a full-blown garden center attracting many more customers. With the expanded business, he has never missed a payment. To keep an eye on things, the elderly man still putters around the place, helping Bill with the operation and providing invaluable advice. Both are winners.
Expanding your business by taking over another business can be a good growth path. First, find an operation that can step you into the future you want. Second, do a business plan. Third, work out an agreement acceptable to both parties--under advice of an attorney.
You are looking to increase your customer base when you take over another business. Pay close attention to that customer base--yours and that of the target business. It's all about the customers. They determine success.