Buying an Existing Business After Leaving Corporate: My Top Discoveries pt 1
I am on a journey of self-discovery, legacy-building, and finding true success. Along the way, I made 10 discoveries that changed my journey. This two-part series may put things into better perspective.
"The best way to predict the future is to create it." - Peter Drucker
Join me on my journey and benefit from everything I've learned.
We all learn as we grow. Every day, we discover something new. Along the way, we make mistakes, and hopefully, we learn from those mistakes. But what if there were a way to make the discoveries without incurring the downside of making the mistakes first?
This two-part series defines this notion, providing the discoveries I’ve made tus far, and giving you the things you need to know to better prepare you before you get there.
The Escape Plan: Crafting Your Exit from the 9-to-5
Why Every Golden Handcuff Needs a Key
A key psychological aspect keeps people tied to their desk jobs. We are conditioned to feel a primal fear of the unknown. We fear what we do not understand. Leaving a secure position to explore new opportunities may be scary, but we must overcome this fear with rational thought.
My first discovery on my journey was the empowering act of replacing fear with logic. The fact is, I face a low risk of failure due to the abundance of resources out there. If I apply my personal experience and knowledge and combine them with my ability to take learned information and turn it into real-world action, I can’t lose. Use the golden key of knowledge to escape the mentality keeping you cuffed to your job.
Gambling on Growth: The Thrill and Strategy of Buying a Business
From Cubicle to Corner Office: The Entrepreneurial Leap
Now, I can’t say that I’m much of a betting man, but I can say that I was willing to gamble it all when it came to building a future and a legacy for me and my family. I experienced tremendous fear; my wife was pregnant, and I was jockeying for a promotion before it all changed.
After my wife had our baby, going back to work was painful. When I was at home during that time, all I could imagine was fishing, camping, and doing all the outdoor things my family wanted. But I couldn’t in the city. I wanted more and was willing to bet it all on my ability to succeed and win for my family. My second big discovery was that I would become a gambler and a smart one.
The Treasure Hunt: How to Spot the Business That’s Right for You
Detective Work: Uncovering the Gem in the Marketplace
My third big discovery was the desperate and critical need for thorough market research before moving ahead.
Before diving head-first, get a lay of the land with reports from IBISWorld or Statista. Identify local services within your niche.
Set your financial criteria. Look for businesses suffering and not making money with the potential for growth, or be prepared to pay top dollar for a thriving business.
Search the area for lifestyle activities and social events you and your family enjoy. Remember, this is a total life shift, not just a career change.
Perform demographic analysis, business health checks, etc. We’ll have a deep dive into this in another installment.
Capital Ventures: Financing Your New Business Adventure
Betting the Bank: Securing Funds Without Losing Your Shirt
When it comes to financing your new venture, you have options. To be upfront, I do not have a finance degree, but if I can do it, you can too. You can do several things to secure funding, and most ventures benefit from leveraging multiple channels. Finding the best channels for obtaining funding was my 4th major discovery.
One of the key aspects of financing your new venture is ensuring you have enough funds to cover the first year of business operations and personal living expenses. This level of preparedness can help you navigate potential pitfalls and hardships and plan for the best possible outcomes.
The Negotiation Nook: Mastering the Art of the Deal
Chess Moves in the Boardroom: Outsmarting Your Sale
To maximize your net benefits in terms of buying negotiations, the first thing to do is find the seller’s motivation for selling. For example, if the seller is retiring, suffering financial hardship, or otherwise selling in a rush, you are in a prime position to negotiate a dream deal. Likewise, if the seller has a deep connection to the business, using the talking point of keeping the seller’s legacy intact may also result in a sweeter deal for you.
Due Diligence or Due Disaster?
The Fine Print That Could Save or Sink You
My 5th major discovery isn’t as common sense as you might think. Everyone knows to do their due diligence before making any major purpose, but when buying an existing business, the devil is in the details. You’ll want to look for financial statements that go back for years, legal compliance records, operational costs, supply chains and vendors, and market analysis.
These strategic areas highlight and forecast pain points. This not only helps to mitigate risk, but it also gives you foreknowledge of seasonal downshifts or other “slow” periods. Reading into the fine print can save you money, time, and stress.
My Final Thoughts: The Future Looks Green
From Corporate Chains to Entrepreneurial Freedoms – The Journey Continues
My first five major discoveries highlighted the critical nature of each area. By delving into the research, going the extra mile, and going above and beyond when it comes to performing the legwork, when it comes time to sign the paperwork, you are in a much better position, and you know it. You feel it.
Doing as much work before you buy as possible will save you a mountain of problems down the road. Many business owners find themselves needlessly in rut after rut when it could have easily been avoided by doing the work before you buy.