A reader of my blog commented on my “So what DO you do” post with this request;
Ben – I’m interested in your experiences in buying a business, was it a good idea, bad idea, what were the pitfalls etc, what were your thought processes when you were buying it etc – can you spare the time?
Never one to disappoint the viewing public I agreed, so here is a start.
I’ve purchased into existing businesses, been part of starting partnerships to start new businesses and also started businesses independently from scratch. Each method has its good and bad points.
My first foray was to buy a share of a manufacturing business. I’d had no previous business experience and wasn’t aware of the plethora of business advice that was available so I did the only thing I could think of and talked to a couple of people. I was lucky that my best friend’s father was grand Poo-bah at the BNZ and the other was the accountant at my work. Their advice, after talking to me and looking at the books, was unanimous: “don’t do it”.
I learnt two very important lessons that day;
- Employees, no matter at what level, seldom truly understand the benefits, and stresses of being in business yourself. Fact is, coming from a six figure salary with its benefits and security and its ties and accountabilities is far removed from the freedom and flexibility, lack of money and third party demands that is business. Yes yes there are intrapreneurs but they still generally have a higher level of security than those on the self propelled route
- High level advice is very important, but don’t forget the passion aspect when buying a business. There is a reason that the non-self employed are just that, often it’s because they lack the ambition or vision to do it for themselves (Jim Donovan will roast me for that comment and I agree, there are exceptions but if you were to look at the median level of ambition, vision, drive, balls (whatever) between self employed and employees, I contend the self employed would be higher)
Of course I ignored the advice and took the plunge. I entered a world of low pay, high stress and little security, but I started upon a journey that has taken me to dizzying personal heights.
So, to answer the initial question…… some advice;
- Talk to people – sure talk to lawyers and accountants but also talk to the Cafe owner down the street, the guy who bought a franchise across the road and the neighbour who went bust trying to start a business
- Lean – no one cares as much about your business as you do. As such you have no option but to understand basic accounting, commercial law, HR etc etc – Luckily this learning is readily available and often free
- Seek mentors – if appropriate form an advisory, or better still a full blown, board of directors. Seek the advice of those with experience. Listen to that advice, take guidance and criticism
- Be realistic – there is always something to do in business but working 24/7 is no good for anyone. Prioritise, compartmentalise and balance
- Don’t sweat the small stuff (but sometimes do) Look at the bigger picture but at the same time keep an eye on day to day trivialities
- And most most most importantly
- Regularly take time out from the business to work ON rather than IN it – the biggest fault with Kiwi SME’s is that they focus so heavily on operational stuff that they don’t allow themselves the space and time to develop the strategic vision that they need to grow their enterprise
So that’s it – well there is lots more and I’ll add things as I have time. There’s a bunch of helpful advice out there, talk to you local economic development association or to BizInfo, check our the neutral websites and talk talk talk
And most importantly en avant (with a hat tip to Jim and Isambard Kingdom Brunel of course!)