What Size and Type of Business Will Work for You?

What kind of business is right for you? Greg Kells of Sunbelt Business Brokers discusses buying the business that fits your experience, lifestyle, skills and resources. This article originally appeared as part of a series called At the Broker’s Table published in the Ottawa Business Journal.

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What size and type of business will work for you? This depends, to some extent, on your previous experience and your financial resources, lifestyle aspirations, family support and skills. But more than anything else, it depends on what you enjoy doing. Imagine a day as the owner of a business. What do you spend the day doing? With whom do you interact?

A day in the life
Many people come to Sunbelt wanting to purchase a franchised fast food business. When I ask them what they think their days will be like, I draw a blank. I then suggest that they will be responsible for employing and managing a significant number of minimum-wage employees

who see their job as transient and who are not necessarily motivated nor perhaps inclined to take their responsibilities seriously. Their customer interaction may consist of “Would you like fries with that.” The owner will be on call 24-hours per day dealing with equipment breakdowns, false alarms, staff who do not show up to work, suppliers who are late with delivery and a myriad of other issues. They will be responsible for the payroll, purchasing, bookkeeping, recruiting, staff training, cleanliness and all the other tasks that befall the owner of a fast food franchise.

In trying to determine what size and type of business will suit you, think about the skills and attitudes of the staff you will be managing and the personal development that will come from interacting with them. Do the same exercise for clients. Think about the nature and the complexity of that interaction—the challenges you will face, the personal development you will achieve and the personal satisfaction you will gain from serving them well.

Working in or on the business
You must also decide where your focus will be directed: working in the business (self-employment) or on a vision of what the business will become. The vast majority of existing business owners work in their business. They make a good living, support their family and contribute to their community. Such owners are comfortable running a business that achieves moderate growth. Others have grand visions of what they can achieve by turning their business into a self-operating cash machine. These owners free their time to focus on the growth of their business and the achievement of their vision.

Still others are serial entrepreneurs who buy underperforming businesses that they can then turn into highly successful businesses and sell at a substantial profit. These individuals repeat this approach with other businesses, applying their business development and management skills to achieve great wealth.

Decide at the start of the process of buying a business which of these routes you wish to take in life. Rely on good professional advisers—every business needs a good accountant, lawyer, insurance broker and wealth planner. If your plans are to achieve a grand vision or to become a serial entrepreneur you will also need a great business coach, a great investment adviser, a great business broker and a great tax and transaction lawyer. You will need other members on your team as well—the quality of your team will make a difference in your success. You will also want to get involved in a local entrepreneur group.

An experienced business broker will guide you through the self-analysis and early decisions about what will work for you. If you don‘t have confidence in your professional advisers, particularly the business broker who is guiding you through the buying process, replace them.

Most business buyers who come to us do not know what they want. Our job, in the early stages, is to help you clarify your vision. Once you have a clearer idea of what you want to do with your life your broker will help you make it a reality. Lay out a plan to achieve your long-term vision and start to work on it one step at a time.

Gregory Kells
Sunbelt Business Brokers of Canada