Okay, you’ve spent several months looking for a business to buy.
You have your financing prepared.
The numbers look great.
Everything looks profitable and everything is perfect.
Except for one thing.
And that’s … unless you’ve bought a business with a system in place that literally “runs itself”, whether it shows up every day or not, all you’ve done is buy yourself a glorified job.
A job where you are likely to earn (if you measure your hourly earnings) less than most of your employees.
A job that is likely to cause you a tremendous amount of stress, anxiety, and pressure every 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 in place.
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 type where you can go away for a year (or more) and come back to find your business stronger than when you left.
In other words, the “machine” that runs your business must be so tuned that its presence is almost an interference. Where you really make the most money when you’re golfing or playing with your kids at Disney Land.
Of course, this raises the question of how exactly to find businesses like that, especially for sale.
Good question.
Fortunately, the answer is quite simple:
And that is, don’t even bother looking at a business that isn’t worth at least a million dollars.
In fact, the bigger the business, the better.
Why?
Two reasons:
1.) First, if you use private investors, it is easier to get financing for this type of business.
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 that the business makes sense, many investors will join you in the blink of an eye.
2.) And second, if you have a large multi-million dollar business, you will have more than enough money to pay an experienced manager to “run” it all for you.
In fact, if you find a good business running flat out, where everything has been profitable for at least five years in a row, you need to do whatever it takes to keep the current management there and stay as far away from the office as possible.
After all, if the manager has been running smoothly and profitably without you before, then there’s no reason why he shouldn’t continue to run smoothly and profitably, whether or not he shows up.
Anyway, the conclusion is as follows:
The worst mistake you can make when buying a business is buying one that depends on you being there.
If you really want to enjoy owning a business (and basically just cashing a check for a living), buy a business that has a perfected system that works and grows on its own, without you having to be there.
