Randy (not his real name) had been in the market to buy a business in the Nashville area since early 2013. A few weeks ago he called to ask if he could retain me to assist in his search effort. Though he had met with about 25 business owners over the past two years, Randy had nothing to show for it; he was ready to be more professional and intentional about his search process.
Randy was not a neophyte. He had run his family’s successful retail business for more than ten years before deciding to sell it in 2012 after the unexpected death of his brother. Randy told me he didn’t have a heart for the business after his brother’s death. But after a few months of emotional recovery, Randy was ready to find a business to buy, manage and grow. However, the process to find the right business had been slower (and much more) frustrating than he expected.
My first question to Randy was what I ask every entrepreneur who says they want to buy a business ….. “what are you looking for?” As simple as this might sound, the answers I hear to this question are usually convoluted. Truth is, most prospective business buyers just don’t know what they want. They are more focused on the result of having a business, rather than the process to find the kind of business that will be the right fit. Most prospective buyers have the attitude “I’ll know when I see it.” That’s why most of them never see it! Another common problem is the prospective buyer business who is looking for a business that’s just perfect, sort of the equivalent of finding a very small needle in a very large haystack. Usually doesn’t happen.
I’m no psychologist, but here’s what I think is going on inside the mind of a wanna-be business buyer ….. without a clear picture of what they want, when they look at an opportunity all they see is problems. Said this way, when they look at a potential acquisition, their brain sees what’s wrong with the business, not why it might be right for them.
When I was an executive at the Walt Disney Company, I decided to become an entrepreneur in the field of southern gospel music (why is another story, call me and I’ll tell you). Through a friend of a friend, I found a small southern gospel music radio business in Nashville that needed energy, capital and direction. It was a perfect fit for what I wanted to do. Though the business had a myriad of problems, I resigned from Disney to buy this small company 800 miles from where I lived. Since I was motivated by a larger objective, I didn’t let the problems in the business, or even distance from my home, dissuade me from taking the plunge. Within four years, I sold the business to a publicly-traded company that made me an unsolicited offer I could not refuse.
The moral of my story, and how I encouraged Randy … find the intrinsic motivation (the why) that drives your desire to buy a business. That’s the only way to focus your search, see opportunities, not just problems.
Tennessee Valley Group
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