Having spoken to many bank managers, accountants, venture capitalists and entrepreneurs over the years generally the consensus is to advise potential purchasers to first work out what they want out of the business they are thinking of purchasing and then to assess this against what they will realistically get. This may seem a really fundamental step but it is one that is often overlooked.
It is sensible to purchase a business that operates in a market/ industry that a prospective purchaser knows and understands and further it is something that they can utilise their own skill set without (to a large extent) reliance on others.
Researching the market/ industry, learning about competitors in the same area, regulations that apply to your prospective business purchase will be key to the overall success of it.
What are your strengths, weaknesses and what are the opportunities and threats to your prospective business purchase.
How much time energy can you commit to the prospective business purchase?
Can you sustain the business with little financial reward and security in the early years of business life?