Acquire Your Passions or Acquire in a Time-Tested Industry?

March 25, 2023

by a searcher from University of Minnesota - Twin Cities Campus in Marysville, WA, USA

Hi all! My name is Jessi, and I'm new to the world of M&A.

Question for the experienced searchers and acquirers out there...

Do you acquire/invest in industries you're passionate about, or do you acquire/invest in industries that are time-tested and recession-resistant (plumbing businesses, locksmiths, etc)?

I'm sure some people are super passionate about plumbing, but let's just say I don't go to sleep dreaming about pipe wrenches. ;-)

Thanks for your thoughts!

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Reply by an intermediary
from Wesleyan University in Granville, OH, USA

I think the restaurant industry is instructive here. I live in a terminally cute village in central Ohio. People travel here for weddings, relaxing weekends, and to retire. It's small, there might be a total of 7 or 8 restaurants, most on our 4 block Normal Rockwell-esque main street. A couple of those spots are a near annual rotation of would-be restaurateurs who followed their passion. They have gramma's recipes and always wanted to have a neighborhood restaurant. The record of first timers here is very poor. The record of people who know the industry, have the proper financing, and correctly judge the market is quite good, one experienced owner pulling off two 'overnight successes' in the past year.

By all means invest in something you're passionate about. Stay level-headed enough to be realistic about the business, a trusted confident can help. Passion will help you through the hardest parts, but we all know that love can cloud our judgement. :-)

Reply by a professional
from Rice University in Jeffersonville, West Norriton, PA 19403, USA

After 20 years and 75+ deals I have an experientially driven POV. When acquiring or investing in a business FIND ONE THAT YOU FALL IN LOVE WITH. I spoke to a SF community member 2 weeks ago and he told me he was looking at acquiring a commercial electrical business. I asked him "why do you have a passion for commercial electrics" and he said "I could careless". I advised him to stop his search and 1) determine what his business passion was and 2) search for businesses in those areas. Commitment in a early-stage business is essential. If we look - as searchers or investors - at the financial aspect only, we will miss the opportunity to tap into 100% pure commitment. It isnt just a business to be acquired - it is an employer, and career, a community member and part of a vitally important part of humanity.

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