Making the leap
January 12, 2024
by a searcher in Redmond, WA, USA
I'm at the decision point for my self funded search. Due diligence is done. Finances will be a bit tight until growth is acheived, but does look possible.
I've seen lots of deals in my professional career, but this will be my first time taking the leap personally. What helped you get over the nervousness and make the leap? Would love to hear your stories!
in Boca Raton, FL, USA
Obviously, I do not have any details regarding your prospective acquisition, so I can't comment on the viability or the business, although your comment about growth "does look possible" is not a very robust endorsement.
The ENTIRE issue comes down to whether you have gone through the business-buying process effectively. What I can comment on however is how I look at this last step, and how I convey that to my clients. Industry statistics indicate that over 90 percent of the people who begin the search to buy a business never complete a transaction. So, here's a bit of insight and motivation: Here is an excerpt from my program 'How To Buy A Good Business At A Great Price' and the Pulling the Trigger lesson. (Interestingly enough, 82 percent of the people who follow our guide and use our consulting acquire a business within 6 months.)
Here's the excerpt.....
“When the time comes for you to Pull the Trigger, there should not be any apprehension on your part except for normal anxieties. In fact, the closing of the sale should just be one more step – no bigger than anything else that you did to get to that point. When you add all the ingredients together, the decision to go ahead should be obvious. If you begin to feel that you are not ready, then it is only because you have not done all your homework. If you do, you’ll be ready – GUARANTEED! Why do Buyers back out at the last minute? Most of the time it’s because they are still not sure. Why do they feel this way? Because they haven’t prepared or educated themselves fully, that’s why! Because they have not put everything in its proper place, they are unable to see the logical sequence in which everything adds up to reach the obvious conclusion that it is a good business to buy. Is it possible that you may feel this way despite doing all the work that you’ve learned? Of course it is! I always say that you should have a healthy combination of fear and excitement during the process, right up to the end. Excitement will keep you going, and fear will keep you diligent. Getting to the point of making the final decision takes a lot of effort. If you do it right, you’ll be exhausted and Pulling the Trigger will feel almost anti-climactic, but it is the right thing to do. The only thing that should prevent you from closing would be the discovery of disastrous information during Due Diligence. And by no means should you let the fact that you have devoted so much time to analyzing a business that it clouds your judgment if it’s the wrong thing to do. However, if it all adds up, why wouldn’t you be able to Pull the Trigger? It almost seems like this should be the easiest part of the deal because it just makes perfect sense to do it. The only reason why people get gun-shy is because they haven’t done their homework. They haven’t exhausted every avenue to educate themselves and learn the inner workings of the business following our plan. They look at buying a business as being no more difficult than buying a pair of shoes. But they soon find out it is entirely different. In fact, it’s like nothing they have ever done before. Whatever nerves or anxiety you may be feeling is strictly your eagerness to get the game/business going. Close the deal and your new life begins, and you will never look back. NEVER!"
Good luck and keep the community posted.
from The University of Michigan in Detroit, MI, USA
If you are incredibly passionate about this industry and the customer you are serving, I think you could still go through with it. Being a smaller business, and you being a intelligent and hard-working person, you can roll up your sleeves and overcome the inevitable challenges over the next couple years to find success while taking some bumps and learn a lot in the process.
If you're not extremely passionate about the business, or don't want to jeopardize your financial investment, you may pass on this one and be better positioned to close on your next deal. As Warren Buffett said something like, 'Investing is a no-called-strike game. You don’t have to swing at everything – you can wait for your pitch.'.
Good luck and hope to hear how it goes! - Jason