There are typically 3 types of buyers in our data base.
- Those that have given up and taken a job
- Others of you are still looking at the web pages trying to see if the perfect business is out there
- The third group is 100% committed to finding a business, and that is their job for now.
Have you asked yourself…. what will it take to make you leave what you are doing now to invest in a business that you can call your own?
I am seeing many buyers looking at service companies with few assets but repeat business such as tutoring, property management, temporary help, etc. I really like service companies myself but one word of caution is to be sure and not make the business all about you. Set it up for growth where your role is management rather than doing the day to day operation, like you will not be one of the tutors or counselors in placing candidates in jobs.
I frequently see buyers profile sheets saying that an absentee business or semi-absentee ownership would be ideal! To be clear, when you invest in a business this is nothing like a stock or Mutual Fund you purchase. It takes time, and your new employees will expect you to be there for them. Eventually, you can set it up to be semi-absentee but it won’t be that way for a while.
There needs to be sufficient cash flow in the business to meet your life style. Most buyers want to also see that there are many things you can do to expand and grow the company. Experienced employees should be key to you. When the seller’s training time is over they will be quite valuable.
Flexibility of the owner is an attractive characteristic for a buyer as well. Buyers do not want to be a slave to their new investment. You will love to hear that they have taken a few vacations over the year and that the business didn’t fall apart.
Spend some time thinking about what does the business have to have for you to leave what you are doing now, and don’t waste time getting packets of information on companies that do not meet your criteria.
You will either be going away from something you are ready to leave, or going toward something you really want to do. It is always better to be going toward an opportunity that excites you and makes your life fuller and more rewarding!
Once you make the right move, you will never look back! Business ownership is one of the most rewarding things you will do in your life.
If you have any questions, feel free to contact Joan Young, President of Sunbelt Business Brokers, Greater Bay Area – [email protected]. Sunbelt also handles Mergers and Acquisitions.