The One Thing Most Buyers Don’t Do Before Buying a Business
Most buyers are obsessively thorough in their approach to buying a business. They exhaustively analyze the opportunity. They meticulously comb through the financials. They create long lists of questions for the seller.
But there is one thing most of them don’t do.
Most buyers don’t really think about the day-to-day tasks of the business.
Some businesses are sales oriented. Others have a service focus. Some are centered around production.
Buyers need to ask themselves “Does the focus of this business work for me day in and day out?” and “What will I actually be doing each day?”
The savvy buyer will ask to shadow a business owner as they go about a typical day.
One buyer met the owner of an electrical business at 7AM and jumped in the truck with him as the owner visited job sites and interacted with employees. He then accompanied the owner back to the office as he planned for the next day and completed administrative duties. Participating in this “ride along” with the electrical company owner assured the buyer that this was the business for him. He came away from the experience exhilarated and ready to make an offer.
Another buyer expressed interest in buying a bar because “bars have music and I like music”. We suggested that this buyer follow a bar owner around for one weekend to view firsthand how much music the owner enjoyed. The buyer quickly saw what being a bar owner really meant in terms of daily tasks and realized that there was more administration, more hands-on management and far less enjoyment of music then he’d expected. The buyer decided to pursue another type of business to purchase.
There are many, many elements to consider when purchasing a business. Just be sure not to overlook the one that is going to impact you every day once you are the business owner.