I often hear from business buyers that they are looking for any type of good business. That approach is very much like finding a trophy wife and saying any lady will do as long as she is exciting. An exciting woman for one man can be a disaster for another. You really need a good fit for your personality. This is the same in a business.
You are getting married to your business, and spending more time with it than with your wife. I am not mechanically inclined so I would never own an automotive shop. I am however a numbers person so selling a product or service where I can use my accounting and sales background would be a good fit for me.
I had an out of work mechanical engineer type person doing pool retrofitting sales for me as a temporary job until he found a new job with corporate America, making very big bucks. He would figure out how to solve the problems the installation crews came up against and automated the quotation process so the price popped up. He was good at both sales and production. He was not however good at pricing the product so that we made enough profit.
Everyone has their strong and weak points.
Find out what type of work gets you up in the morning. A salesman can take any type of wholesale or service type business and turn it into a moneymaker, regardless of how well the prior owner has done. A trained retailer is good at working with fixed retail locations while anyone not a retailer will die running a retail storefront. Five percent of the owners of most types of business make a very big profit. Thirty percent do very well, while over fifty percent are starving. The issue is not what type of business is a good business to buy but what type of business will be a good business for you to turn around and create with.
Creative Commons Attribution: Permission is granted to repost this article in its entirety with credit to Business Buying Services and a clickable link back to this page.
Image credit:FogStock/Vico Images/Erik Palmer FogStock
Finding Out the Seller’s Motivation
/in Articles, Business Buying, Newsletters/by Willard MichlinWhat Motivates a Business Seller?
When working with buyers as a business broker and a CPA doing due diligence, the buyers universally ask one question. “Why is the seller getting out?
This is a good question but the question I ask is, “How do you know if the seller is telling you the truth?” Read more
Is it Ethical to Sell a Successful Family Business When You Have Children and Grandchildren?
/in Articles/by Willard MichlinI have been a business broker for 25 years, and after selling hundreds of businesses, I have some very strong feeling about successful business owners selling their businesses.
Story #1: Abe Michlin (my father) and his recycling business.
Dad died in November 2016 at 96 years old. His primary goal for the since 1980 was to turn the business over to one of the children or grandchildren. Which person that would be changed every few years. When I was in college, I thought it would be me. But by the time I was 27 years old, and my mother died, it became clear that I had bigger dreams then my dad. I left to become a buyer of foreclosure real estate, and make my first small fortune. My brother-in-law, Jerry came into the business along with Shana, my new step-sister. Jerry ran sales and production. Shana ran the office and handled anything dad needed to be done. Dad ran the business but on a part time basis. His new wife wanted dad to smell the roses and see that there was more to life then business. Dad loved business and regretted every retiring at all, even when he physically and mentally was forced to.
From 1980 to 2005 he planned his exit strategy.
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Business Buyers Advice: What Type of Business is a Good Business to Buy?
/in Business Buying/by Willard MichlinI often hear from business buyers that they are looking for any type of good business. That approach is very much like finding a trophy wife and saying any lady will do as long as she is exciting. An exciting woman for one man can be a disaster for another. You really need a good fit for your personality. This is the same in a business.
You are getting married to your business, and spending more time with it than with your wife. I am not mechanically inclined so I would never own an automotive shop. I am however a numbers person so selling a product or service where I can use my accounting and sales background would be a good fit for me.
I had an out of work mechanical engineer type person doing pool retrofitting sales for me as a temporary job until he found a new job with corporate America, making very big bucks. He would figure out how to solve the problems the installation crews came up against and automated the quotation process so the price popped up. He was good at both sales and production. He was not however good at pricing the product so that we made enough profit.
Everyone has their strong and weak points.
Find out what type of work gets you up in the morning. A salesman can take any type of wholesale or service type business and turn it into a moneymaker, regardless of how well the prior owner has done. A trained retailer is good at working with fixed retail locations while anyone not a retailer will die running a retail storefront. Five percent of the owners of most types of business make a very big profit. Thirty percent do very well, while over fifty percent are starving. The issue is not what type of business is a good business to buy but what type of business will be a good business for you to turn around and create with.
Creative Commons Attribution: Permission is granted to repost this article in its entirety with credit to Business Buying Services and a clickable link back to this page.
Image credit:FogStock/Vico Images/Erik Palmer FogStock
Business Buying Horror Story: Dog Kennel – He Never Got His Questions Answered
/in Business Due Diligence Horror Stories/by Willard Michlin“Bill” and his family were looking for a dog kennel and went on to the Internet and started looking at various “Business for Sale” web sites. He located a dog kennel for sale with real estate in another state. Bill and his family had experience with boarding animals so it seemed the perfect business.
Without Visiting the Actual Business He Collected His Information by Phone, Fax, e-mail and Regular mail
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Business Buying – How Much Does An Owner Have To Work
/in Articles/by Willard MichlinMany business buyers have the idea that they will buy a small business to create a second income. The idea is to put in 10 hours a week, or less doing the management functions such as, posting the quick books, making sure the employment forms are filled out correctly and are complete. Lastly they know they have to Read more
Case Study: Laundromat
/in Articles/by Willard MichlinThis is a true story of one of my assignments regarding a Laundromat in Los Angeles County. This story has turned out to be one of the most fascinating tales I have ever heard.
I was not brought in before the purchase but 3 years later when problems arose to be an expert witness. Read more
Business Buying Tips: Where do you find the right business to buy?
/in Business Buying/by Willard MichlinThe first step in locating a business to buy is to decide what type of work you are interested in and what you are definitely not interested in. This makes the first step, going out in the world and making very complete lists of possible kinds of businesses available to you. Do not put owning a scuba diving shop on the list if you do not swim.
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A Fresh Way to Find a Business to Buy
/in Business Audit Tips, Business Buying/by Willard MichlinIn my seminars, I have been talking about the various options to people that want to own their own business.
They are:
A. Start a business from scratch and build it slowly while maintaining your existing job.
Doing this allows you to learn all about the industry you are going into. There will be few surprises by the time the business hits its break-even point. Look at all the people that go on TV shows to raise capital for their expanding business. They have a solid direction, and will succeed if they have good business basics.
B. Buy an existing business that claims it is making a profit level that you can support your family and your life planning. Read more
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/in Articles, Business Buying/by Willard MichlinWhen I was in college, 1965-1969, we talked about the $200,000 billion underground economy. Now 50 years later it must be 10 times that big. A high percentage of small businesses I look at have some cash payroll or some undeclared cash sales. Because of the competitiveness of the market, those that are not paying some or all of the required payroll taxes or sales taxes can quote better prices then those that are paying union wages and benefits or are paying all of the required payroll taxes. This is fraud in business. Read more
Business Buying Techniques: “The Back Door”
/in Business Buying Troubleshooting/by Willard MichlinThe battle cry of investing is “Reduce risk while at the same time increase the yield.” This is the game that people with money to invest try to do everyday. In the end it is difficult if not impossible to measure risk, so many decisions are made based on emotions or feelings about an investment or stock.
One of your friends, comes to you with a new business start up
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