Searching for the “Perfect” Business
The search for the perfect business has been going on for just about as long as the search for the fountain of youth. And with the same lack of success.
Too many buyers are out there looking for the perfect business. As a result, they miss out on great opportunities in non-perfect businesses.
This is a syndrome that’s been around for centuries. Be wary about letting the perfect be the enemy of the good. You may never make a decision. You’ll always be hoping for something better.
We would never tell you that you have to buy a particular business–you don’t. And, heaven forbid, if you think we’re advising that you buy “schlock.” We’d never suggest that!
But, if you keep looking at good businesses but holding off buying because you’re hoping for a better one, you may find yourself in a long-term rut of non-decision.
Don’t know if this will help cure your chronic indecision, but here’s one statement you can take to the bank:
No business is perfect. None.
But, that’s not necessarily a bad thing. In fact, while it may be counterintuitive, the fact that a particular business is not perfect, may, in fact, be one of its most attractive qualities!
Here’s a quick illustration.
Two virtually identical businesses are for sale — same industry, same product, similar sales and cash flow. Business A is brilliant at marketing and sales. Unfortunately, Business B is at the other end of the scale — very weak when it comes to marketing and sales.
Which business would a buyer be more interested in? Which is likely to command the higher price?
But the answer could certainly turn out to be Business B.
The search for potential buyers for Business B should focus on buyers with strong marketing and sales experience. The Seller (and/or its representatives) should forthrightly identify the weakness in marketing and sales. For the right buyer, the weakness of Business B represents an opportunity.
Businesses should be bought, sold, and valued based on their future prospects. And all other things being equal, by replacing weak marketing and sales skills with stronger ones, the right buyer is more likely to create a rosier future for Business B than he could for Business A, which already has strong marketing skills factored into its results.
As a buyer, don’t automatically be scared off by problems. Consider how your strengths fit into those weaknesses. You may be surprised at how that fit will allow you to create strong business value by seizing opportunities that former ownership didn’t have the skill or experience to find.
And, as a seller, it’s never the right thing to hide business problems from a potential buyer. And that’s true for a whole lot of reasons, beginning with how important credibility is to a successful sale.
Honestly identifying business weaknesses and potential solutions can actually add value to a business.