When you are looking at businesses to buy, it can be very tempting to assume that the reason the business isn’t making record profits is an apathetic seller. What many budding entrepreneurs fail to realize is while it can be the case that a business could do much better with a fresh and motivated owner, running any business on a day-to-day basis is very hard work.
An existing business is open because of the system that the current owner has in place – and in many cases changes that could bring more profits are not made simply because there is no money or time to do them.
What can happen when a buyer is over enthusiastic about “revamping” a business? They walk into a business that is currently functioning and profitable, and (without trying to understand how the business works and what is keeping the doors open) gut the current system and try to implement one of their own. This is an enormous mistake.
As a buyer, you need to take the time to learn the business as it currently exists and give yourself the time to figure out what is currently working and what is not long before you try to implement any changes.
Another typical mistake is to completely renovate a space before you have a clear picture of what really needs to be changed aesthetically and what can remain as-is. By undergoing a major renovation, many new business owners blow through all of their working capital and end up in the hole financially before they even know how to make the business turn a profit.
The message here is don’t be one of these buyers. Don’t fix what isn’t broken! Instead, learn your new system and slowly implement changes only after you are absolutely sure that they are necessary and only when you have more than enough capital to cover them.
Are you a business buyer who wants a business that needs a lot of changes so you can make it all your own? Do you have questions about what kinds of changes are necessary and which ones can wait? Ask us! Please leave us a comment or question here, and we will be happy to help you.