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How to choose a sector when buying a business

Useful tips on choosing a sector that is right for you which should help during the first stage of the business buying process.

If you are considering buying a business, you will need to carry out a certain amount of preparatory work before investing.

There's a wide range of considerations to take into account, such as your previous experience, skills and qualifications, as well as more personal attrributes like personality type and lifestyle choices.

Assess your personal skills

It's worth spending an hour or so carrying out a full skills audit in order to take account of your abilities and experience. First of all, list your formal qualifications, along with any licences, professional memberships and associations.

You should then work backwards through your career to establish all of the various tasks and roles that you have undertaken; remember to include any additional duties you may have carried out regularly (even if they weren't in your job description). If you have done any voluntary or community work, it's beneficial to include that too.

Finally, look at the skills you have gained from hobbies, interests and domestic responsibilities. Be imaginative and include transferable skills such as household budgeting, food preparation, cleaning, gardening, maintaining the car and so on.

The end result should be a fairly comprehensive list of skills that you could use in your new business. Carefully work your way through the list and highlight the tasks that you enjoy the most and any skills where you particularly excel. Now you have a whittled down list of skills that you are good at and that you enjoy using.

Take your personality into account

Your whittled-down list should give you a strong indication of where your strengths lie and of the sectors that you could thrive in, as well as providing an idea of areas to avoid.

For example, someone gregarious who has enjoyed working with large numbers of people in the past may want to consider the hospitality sector. On the other hand, someone more introverted may prefer to set up an online business and work from home.

Similarly, a physically active person might enjoy working outdoors and it would therefore be worth considering service sub-sectors such as agriculture, construction, maintenance, and garden work. Whereas, anyone with a digital background might lean towards a business in the tech and media sector.

It is extremely important to be realistic about your prospective business because most new business owners find themselves working very long hours, especially during the initial start-up phase.

Fitting your business into your lifestyle

Lastly, think about your lifestyle and how you want to blend that with your new business. For example, if you have caring responsibilities, you may not want to work long or antisocial hours. This would mean that some hospitality businesses, such as running a fast food outlet, could be unsuitable (although these are ideal for anyone with very little culinary trade experience).

On the other hand, it might be possible to successfully combine other types of hospitality companies with caring responsibilities. Running a bed and breakfast, for instance, allows for some flexibility in order to accommodate the rest of your life, providing you are willing to live and work in the same residence.

No matter what your skills or background, you are sure to find a business sector to suit you and your lifestyle if you spend some time carrying out a personal analysis before investing.