The Single Worst Mistake You Can Make When Buying A Business
Okay, so you've spent several months shopping around for a business to buy.
You have your financing lined up.
The numbers look excellent.
Everything seems profitable, and everything is perfect.
Except for one thing.
And that is...unless you've bought a business with a system in place that literally "runs itself" -- whether or not you show up every day -- all you've done is buy yourself a glorified job.
A job where you will probably make (if you measure your income per hour) less than most of your employees.
A job that will likely cause you an enormous amount of stress, anxiety and pressure every single day of the week -- including weekends.
Why do I say this?
Because that is what happens many times when someone buys a business without the proper systems already installed.
You see, the key to buying a business is making sure you buy one that works on its own, whether you are there or not.
I like the way best selling author Robert Kiyosaki explains it in his book, "Rich Dad, Poor Dad."
He defines the ideal business as the kind where you can go away for a year (or longer) and come back to find your business stronger than when you left.
In other words, the "machine" that runs your business should be so fine-tuned your presence is almost an interference. Where you actually make more money when you're out playing golf or goofing off with your kids at Disney Land.
Of course, this begs the question of how exactly do you find businesses like that, especially for sale?
That's a good question.
Luckily, the answer is pretty simple:
And that is don't even bother looking at a business that is not worth at least a million dollars.
In fact, the bigger the business the better.
Why?
Two reasons:
1.) First of all, if you use private investors, it's easier to get financing for these kinds of businesses.
Frankly, you will find it MUCH easier to get financing from investors (as opposed to a bank, for example) because they are always looking for good deals.
And if you can show them the business makes sense, many investors will jump on board with you in a heartbeat.
2.) And secondly, if you have a large, multi-million dollar business, you will have more than enough money to pay an experienced manager to "run" everything for you.
In fact, if you find a good business running on all cylinders -- where everything has been profitable for at least five years straight -- you should do whatever it takes to keep the current management in there and stay as far away from the office as possible.
After all, if the manager has been running things smoothly and profitably without you before, then there is no reason why it shouldn't keep running smoothly and profitably whether you show up or not.
Anyway, the bottom line is this:
The worst mistake you can make when buying a business is buying one that is dependent on you being there.
If you want to really enjoy owning a business (and basically just cash a check for a living) then buy a business that has a fine-tuned system that runs and grows itself -- without you having to be there.
