Data from the U.S. Bureau of Labor Statistics shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more, the main cause being a lack of experience.

One thing is certain, businesses don’t succeed by themselves. A business almost always succeeds because of the owner.

In many of those cases above the business owner is lacking experience, and is unaware that he is failing until it is too late.

However, with the availability of professional counsel and advice, inexperience should not be a reason to fail.

So, before you acquire your new business, it is imperative that you:

1.) Investigate the market

You have to find an opening or unmet need within a market and then fill it rather than try and push your product or service in. It's a lot easier to satisfy a need rather than create one and convince people that they should spend money on it.

The company you are trying to acquire must meet the needs of its market. And well.

How can you tell? One of the ways would be – even before asking them, simply by looking at their financial statements at the revenue figure trailing for the last 3 years.

If there are dips or rises in revenue you can have that conversation with the seller.

2.) Improve on your knowledge on the business you are trying to acquire

Many, not all, new business acquirees / future owners lack business savvy and relevant leadership experience in areas such as organization, structuring, strategy, networking, hiring and managing employees, compensation, capitalization, and uncovering and assessing the hidden risks and exposures associated with operating their newly acquired business.

But that won’t have to be you. And that is why you need to do your research.

Study, learn, and prefer “boots on the ground type of a team” like reaching out to mentors, lawyers, accountants, and other professionals to help structure your business, and improve your understanding and business skills.

3.) Have adequate financing and access to capital

Let me preface this:

Lack of capital makes it difficult to pay your bills, loans and other financial commitments. Therefore, lack of access to capital and an inability to attract investors will affect your capacity to grow or scale the business, which should probably be a thing on your priority list.

You also don’t want to be in a position where it would be challenging to ask for a loan after the acquisition, say after a drop in the revenue.

For some, raising capital appears to be an odious task. But look at it this way.

Those who do go out to raise capital, find themselves almost always in a more beneficial position and growth prospects than those who don’t.