Choosing A Business

Being based in Florida, I get way too many calls from prospective ‘business buyers’ who have sold their businesses up north, they may be retired, and now they’ve settled down here. After a few months of playing golf, and being driven crazy by their spouses, they decide they want to get back into business. They think they want to buy a business, but the truth is they do not really want all the dirt or hard work that comes with it. What they are truly looking for is a way to keep busy.

And so they spend their time looking at businesses. In fact, the process has actually become their new job. This way, when someone at their clubhouse asks them “what’s up”, they can say: “I’m looking to buy a business”. It is a feel good thing. They search listings, they do research, meet with sellers, compile valuations, hire accountants, engage brokers, get busy with negotiations and ultimately, they always find a compelling reason (at least in their minds), to not buy any business. They usually don’t even make any formal offers.

So why am I telling you this? It’s simple: I don’t want you to become a ‘Professional Business Analyst’ which is what many people evolve into after too much time looking. That is not your goal here.

The intention is for you to buy a good business, pay a fair price, and build it into something great.

In order to do so, there are a few things to keep in mind:

  1. There is no such thing as the ‘perfect’ business. It does not exist. If that is what you are seeking, it will not appear so stop looking.
  2. It is critically important for you to conduct a thorough search and do all of the necessary analysis and review. This is a major decision. However, the old adage of ‘analysis to paralysis’ can easily take hold. No, you should never be reckless, but all of your groundwork must be done with the goal of finding one to buy; not just to find a reason to not purchase every one.
  3. You must make offers! It is the only mechanism available to elicit the seller’s perspective, to demonstrate you are serious, and to get the deal rolling. Regardless of the outcome, the offer is the ignition to a meaningful dialogue. Keep in mind that any offer is YOUR offer, and do not allow yourself to be bullied by anyone on the other side regarding price, terms, or conditions. Again, it is your offer so construct it as you see fit in order for you to execute the deal. Some will be rejected and others will be countered by the seller. Either way, get into the habit of getting the deal moving along and a bona fide offer is the best way to accomplish it.

Above all, adopt a buying strategy, not a looking one.

I am certain you have far more important things to do with your time than to waste it.


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