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How To Pick a Good Business

  1. Does the potential buyer have a “busted pipe” level problem that they want to pay to have solved now?

  2. Do they already buy this type of solution or does it require them to change their normal way of doing things?

  3. Are they able and willing to spend the money to have the problem solved for them?
  1. Is the market growing by 10-20% year over year?

  2. Do you have an unfair advantage in acquiring new clients over the competition?

  3. Is there a recurring revenue aspect naturally baked into the concept (SaaS, Membership, repeat reorders, etc?)

  4. Are there companies selling non-competitive products & services to these clients?

  5. Another important question to think about is, can this business generate cashflow soon without a considerable amount of capital or does it require an injection of capital to get it off the ground.

Ending Notes:

Over the last 25 years, I’ve found that if you have good answers to these 8 questions you are likely in a really good spot. On the flip side if you don’t have a good answer to any single one of these questions you could be on shaky ground.

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