There are two types: A) Those business buyers that are gainfully employed and B) Those that are “on the street”. The phrase in quotes is my pet name for folks that are in a desperate phase of their life scrambling to get a paycheck. There is a simple answer to whether you have a job or not. Its either Yes or No. In either case it’s not s simple answer as to whether you are a business buyer or not. For example if you are on the street and looking for a job then you are not a business buyer. However, if you have totally jettisoned all efforts to find a job and are instead looking for a business then you are business buyer. Let me tell you from experience it is much harder to buy a business if you have a job than not. The only advantage the employed individual likely has is access to more seed money for his venture. People on the street, unless they have a good nest egg, will find it tough to cough up money for the cause. However our buyer with the job is going to have less time, less energy, less focus and less “desperation factor” than the street guy.
The desperation factor is the prime mover of the business buyer. This is similar to “back against the wall” syndrome. When you are forced to perform you will perform. At some point the specter of continued poverty will light a match under even modestly ambitious folks and prod them to take massive action. In the case of acquiring a business massive action is the process of finding, negotiating and financing a deal come hell or high water. It is a churning process which can last six months to a year at full throttle. At any point along the way deals will fall through. But the supremely motivated buyer will persist and juggle ten deals at a time throwing out one after another that he can see will not work.
When all of a sudden a deal gets handed to him on a platter. It could be sent from heaven but he isn’t even sure its a good deal. But one by one the obstacles fall away and the finish line starts to loom larger. Still, other obstacles appear out of left field. The bank wants legal and appraisal fees, the seller wants more cash, the financing sources haven’t even committed yet. The seller gets cold feet. The buyer picks away at the issues piece by piece while time and money requirements still work against him. The seller wont wait forever while you try to get financing. The buyer is out chasing twelve to fifteen lenders for the deal until one finally gets on board. The buyer is negotiating the contract and at the same time performing his own due diligence by showing up at the headquarters and sifting through records.
Can you do all this and hold down a full time job too? Good luck with that. Feel good about yourself if you do not have a job. Its by far the best way to successfully buy a business.
