When potential business owners are looking to buy, their glasses are often rose-tinted. They are determined to carry out every part of the search for a prospect on their own and probably underestimate how long it might take to find an ideal candidate.
A key example is a first time business buyer who I've been coaching. At Calkins Law Firm we will always lend a hand to an aspiring business owner or first-time business buyer. This individual (like so many) did not have a clear idea of the type of business they wanted to acquire. I advocated for creating a deal magnet to generate a steady flow of unsorted acquisition opportunities. This is ideal, especially when there isn't a clear target in sight. An effectively built and managed deal magnet is a reliable way to filter options and home in on a good fit for the buyer. There's a lot of review and analysis involved and that holds tremendous value for an aspiring business owner or first time buyer. That said, the everyday reality is that an effective deal magnet takes a good deal of time and a decent amount of investment.
Despite my encouragement, this potential buyer didn't opt to follow my advice. For whatever reason, this isn't an isolated event. Over the years I have observed that aspiring business owners and first time buyers will typically not want to engage a business finder. They instead attempt to perform the acquisition search themselves.
This phenomenon always leaves me puzzled, since, by definition, an aspiring business owner is inexperienced and will have to deal with a steep learning curve. Their chances for success are slim. The very rare exception is an aspiring business owner or first-time buyer who has already spent time searching for acquisition opportunities for someone else. But even at that, the search takes time. And it's often more drawn out than the potential buyer ever anticipates.
Years ago I was told that an aspiring business owner should plan on the initial acquisition search taking about two years' time. Of course that's not a hard and fast rule. I have seen situations where the search took less time, particularly in cases where circumstances aligned and the acquisition opportunity was dropped into the aspiring business owner's lap. On the other hand, I've seen the search take much longer than two years. This isn't an exact science and every situation is different.
I've heard again from the aspiring business owner and their latest update lends even more weight to my argument for the value of engaging a deal finder to build a deal magnet. They explained that they'll likely take a job if nothing pans out soon. But what they're missing is that this isn't an either/or situation. Instead of giving up on a dream, the aspiring business owner could take a job, engage a deal finder, and keep their entrepreneurial light burning. They could be earning assets to put toward the search and the new position could also open them up to unexplored options.
The most effective business finders know how to search for a business acquisition opportunity both in situations where the aspiring business owner knows what they're looking for, and when they don't. An experienced and efficient deal finder has a deal flow going at all times - that's just part of being effective. Since they have a deal magnet of sorts already built and operating, the time frame can be more compact and the process streamlined.
These are just a few of the reasons why I think a strong case can be made for any aspiring business owner or first time buyer to engage and rely on a business finder. Instead of taking time off from work to conduct an acquisition search that could take two years or longer, they could keep their job, keep the assets flowing, and invest a few dollars in tasking a seasoned deal finder to find a business. This is yet another case that proves the importance of searching out experts and relying on their measured advice. And the more you experience the more you realize that life doesn't seem to be short of examples like these.
Experience and Sound Legal Advice
Calkins Law Firm believes that from the outset, there is no substitute for seasoned counsel when looking to buy a business. This is especially true for first-time owners. That's because when setting out on this journey, you just can't know what you don't know. As much as potential buyers want full ownership of the process, their true strength comes in trusting professionals that are experts at what they do. So instead of casting an ideal gaze on the future, why not choose the practical approach and partner with an experienced professional.
At Calkins Law Firm we are careful to objectively apply our expansive legal know-how to your specific situation and concerns. If you're considering becoming a business owner, get in touch to find out how our team can help.