Myth Number One
It’s a faulty assumption that prospective business buyers know from the outset the exact kind of business they want to buy. Experienced business brokers and intermediaries have learned that most business buyers end up with what is sometimes a far cry from what first captured their imagination.
Take, for example, the old story of the buyer who saw (and probably smelled) a doughnut shop in his dreams. This was the business he was sure he wanted to buy–until he found out that someone, most likely him, had to get up at 2 a.m. to make the doughnuts a reality. It is important that, before falling in love with a business dream, prospective buyers understand the realities and think hard about their own personalities–what they like and hate to do. Obviously, if one likes a good night’s sleep, the doughnut shop is not a good business to go into.
In discovering the right business for the right personality, here are some of the crucial questions a prospective business buyer might ask himself or herself:
- Does the business look exciting and interesting to me?
- Do I feel that I can improve the business?
- Would the business offer me “pride of ownership”?
- Would I feel comfortable operating the business?
Myth Number Two
Another wrong theory about buyers is that money is the key motivator in their seeking to own their own business. In fact, if money is a buyer’s main reason for desiring to own a business, a “wrong-move” alarm should go off before things go any further. Most studies indicate that money is somewhere below the midway point of the list of reasons people are interested in a self-owned business. Those who go into business for themselves and/or buy a business want to run their own “show,” be their own boss and build something for themselves. Money is the by-product (hopefully) of having the opportunity to achieve business success on their own terms.
A recent newsletter from a franchise consulting company contains comments from people who have just purchased franchises. These people provide resounding proof that money is not a major motivator. With franchises, they point out, money can’t be an issue, because a new franchise has no income, only the promise of it.
If money doesn’t provide the driving force behind buying a business–what does? The following survey shows the real reasons for wanting to be a part of the independent business scene:
- Pride in service or product
- Customer contact
- Employee contact
And what about the buyer who dreamed of doughnuts? He is purportedly now content, testing the wares in the mattress section of his franchise furniture store.