Nearly every prospective business buyer asks themselves the question at some point in the process as to whether or not buying a business is no more than buying themselves a job. Or, they get the same inquiry from others who they may consult in the process, and most often from those who are not immediate advisors. It is a valid point and while some may look at it negatively, I do not believe the concept of potentially buying a job is the right way to interpret it and this is especially true right now.
While many prospective business buyers state they want to buy a business to better control their own destiny, the fact is that most are either looking to replace an income or generate one. With unemployment still at ridiculous levels and no immediate hope it will decline, what is really wrong about the idea of buying a job? However, if the business will never evolve into anything greater, then it is not the right business or approach.
The one key element to consider is that unlike being an employee, there is no ceiling placed on the business owner’s potential income.
As an employee, who hasn’t griped about not being compensated commensurate with one’s contribution? It is a very common employee critique. As an owner however, no such restrictions exist.
The trade off for dealing with all of the pressure and headaches that come with being an employer is the incredible gratification one gets from being in control, not having any limits, the opportunity to dramatically improve one’s quality of life and to ultimately build value which one day can be translated into a financial windfall.
I cannot imagine ever working for somebody.
Despite the associated problems of business ownership, the scales are entirely tilted towards the positives when weighing the employee versus employer options.
Is it possible that in some potential business purchases the buyer is effectively buying themselves a limited income stream? Of course it is, but so what? While this situation is typically more applicable in smaller businesses generating more of a “living” than major profits for the owner, at the very least you are putting yourself in a position to reap all of the wonders that business ownership can bring. And that, in itself, is the key to future financial success.
Furthermore, even if the benefits do not reach one’s initial aspirations and the business evolves into nothing more than employment for the owner that can still be pretty darn good – especially in today’s dismal employment market, or compared with having to deal with a boss. Plus, you will have a tremendous learning experience and can sell the business and move on to another, more opportunistic situation. That is exactly what I have done for more than twenty years. So to me, it is a no-lose situation.
On the one side you can guarantee yourself a job and with a bit of hard work, ingenuity and a dose of good luck, the upside can be enormous.
If at some point you are having second thoughts and you start to believe that buying a business is simply buying a job, then congratulate yourself because that makes you infinitely smarter than anyone who chooses instead to spin the wheels trying to find a “going nowhere fast” job
that in no time at all they will likely despise, and certainly they will never have a chance to grow in it as an employee like you will as the boss.
Have a great week.
Richard Parker
Diomo.com