Step 1: Find the Right Business for You Be very honest with yourself about your strengths and weaknesses. The right business will grow from your strengths, and not suffer from your weaknesses. Never, ever buy a business simply because you like the product. You love birds, but that doesnt mean youre qualified to run an exotic bird store where marketing may be the biggest skill that you need. Whatever you do best must be the single most important driving factor of the sales and profits of any business youre thinking about buying. Ill use an example to illustrate: Margaret was an attorney by education. When she decided to buy a local moving and storage business, she had zero experience in the field, the industry had an awful reputation, and men controlled the business almost exclusively at every level. 111

Her greatest strength, what she did bestdealing with people and making them comfortable and willing to trust herwas the driver to her success. Margaret realized that most people dont like moving companies, and she understood a key issue: In most households, the woman takes charge of a familys move and doesnt like dealing with slick salesmen or truck drivers. So Margaret hired females to handle every sales call and to be at the initial meeting. In less than five years, sales grew from $1 million to $7 million, and profit zoomed from $200,000 to almost $2 million. Ask yourself these questions, and be very honest: What am I good at? What are my greatest strengths? My greatest weaknesses? What type of business will grow from my strengths? What businesses dont I want? HowmuchmoneydoIneedtoearnfromdayone?WhatdoIexpect? Can I manage employees? Do I prefer dealing with the public, or

What industry do I know best? Is there a certain niche I can exploit? In what professional roles did I experience my greatest successes? WhatamIwillingtosacrificeforthebusiness?DoIhaveanyrestrictions? Your answers become the basis of your Golden Rules that you must apply every time you visit a business. Over the years, Ive found that five Golden Rules are not too much, or too little, to use in judging a good pros- pect. Here are my five Golden Rules: The business must be salesand marketing-driven. The business must have some element of exclusivity. For example, the product or services sold are-sold only within a certain protected

The business must have a product or service with a high gross margin, which will allow me to fund various activities to drive the business, and give me a cushion for a few mistakes along the way. There must be built-in demand for the product or service being offered. Business products or services cant compete solely on price. You must develop your own rulesit is critical. Your Golden Rules must be specific. Dont say, I want to spend more time with my family. Say, The business has to take my time from Monday to Friday only. 112 Buy Your Own Business Over the years, Ive added a sixth and seventh rule: Buy businesses with few employees. Generate repeat business from the same client base. Im willing to forfeit Rule 6 or Rule 7, but I wont compromiseever on my Five Golden Rules. You cant, either.