How do you buy the best business? Here are three rules I use to make that difficult decision.
Choose a business that you like. You must be enthusiastic about the service or industry to succeed. This is the #1 rule.
Secondly, only choose businesses with a high margin of safety in the price. Look for businesses that can take a downturn. Never get involved if the margin is too slim as you always need to be prepared for compression.
Lastly, only shop for growing industries with minimal competition and also make sure that you can easily replace your staff. You never want a business that rests on one individual’s experience or reputation.