Buying an existing business or franchise can be one of the most challenging and rewarding experiences in your professional life. Preparing yourself both emotionally and financially for your purchase must happen long before finding that perfect opportunity. A few of the things we urge BizON buyers to think about is why they would want to buy an existing business or franchise; what their purpose for the purchase is; is entrepreneurship through acquisition a good idea? And do they have a long-term vision for the growth and exit of the business. With that said, over the last 4 years we’ve had the privilege of experiencing the different types of business and franchise purchasers out there. Here is what we have uncovered:
The Long Runner: Long Runners are business owners looking to buy, build and create something long-lasting out of something they are passionate about. These people look for businesses they can incorporate into their lives and eventually build a legacy out of. Long runners are huge on creating a lasting culture and following for their business and will look to pass the business down to a family member or buyer with the same or similar values.
The Flipper: Flippers are people who look to buy businesses they can innovate, grow to its fullest potential and re-sell them after a couple of years in order to secure a sufficient return on their investment. The interesting thing about flippers is that this cycle continues with multiple business purchases and sales.
The Oh Shit! Buyer: These are buyers who thought entrepreneurship through acquisition would be easy and quickly come to realize that it is not. There is still much hard work involved in taking over an existing business, even when it is turn-key. These people likely bought the business focused on the financial reward rather than considering the potential challenges that come with growing and maintaining an existing business.
We urge you to ask yourself: “Which of these 3 categories do you fall into?” This can be the difference between having a more challenging than rewarding experience.
Also, a note to sellers: it is vital to identify what type of buyer is buying your business to avoid a deal that may fall through or a potential business owner that may damage your legacy and what you created.