You'd Better Shop Around

Basic Instincts

No matter how thoroughly you look in to the background of a company, there comes a point when you must simply trust your instincts. "If something doesn't seem right, don't buy, but otherwise, be willing to make that leap of faith, because there's no such thing as a sure thing," says West.

When it came to purchasing The Crab House, Nakashima relied on his instincts. "After looking at the numbers, it didn't make sense to buy the restaurant, but I had a feeling it wasn't being managed properly and that my partner and I could turn it around," he says. "Fortunately, I was right. The first month we showed a profit, and we've been increasing sales ever since. We bought the business for $235,000 when it was making $600,000 a year, and in the first 10 months of operation, we made more than $900,000. This year we're looking at $1.2 million, and we just signed a lease for another location."

Certainly you should do as much research as possible. But, says Morris, "[You should also] listen to your intuition. If you find a company that isn't doing well, but you think you can turn it around, buy it and try."

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This article was originally published in the August 1999 print edition of Entrepreneur with the headline: You'd Better Shop Around.

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