Why It Can Be Hard to Find the Right Business to Buy

Randy (not his real name) had been trying to buy a business in the Nashville area since early 2015. A few weeks ago, he called to ask if he could retain me to assist his search effort. Though he had met with about 10 business owners over the past two years, Randy had nothing to show for it. He was ready to be more professional and intentional about his search process.

Randy was not a neophyte. He had run his family’s successful retail business for more than ten years before deciding to sell it in 2014 after the unexpected death of his brother. After a few months of emotional recovery, Randy was ready to find a business to buy, manage and grow. However, the process to find the right business had been slower and more frustrating than he expected.

My first question to Randy was what I ask every entrepreneur who says they want to buy a business: “What are you looking for?” As simple as this might sound, the answers I hear are usually convoluted because most prospective business buyers don’t know what they want. Most prospective buyers have the attitude “I’ll know when I see it.” That’s why most of them never see it.

A related problem to finding the right business is that the prospective buyer is looking for a business that’s perfect; it’s the equivalent of finding a very small needle in a very large haystack. It seldom happens. Without a clear picture of what they want, when they look at an opportunity, all they see is problems. When they look at a potential acquisition, their brain sees what’s wrong with the business, not why it might be right for them.

When I was an executive at the Walt Disney Company, I decided to become an entrepreneur in the southern gospel music business (why is another story, call me and I’ll tell you). Through a friend of a friend, I found a small southern gospel music radio business in Nashville that needed energy, capital and direction. The business had all sorts of problems, but it was a perfect fit for what I wanted to do. I resigned from Disney to buy this small company 800 miles from where I lived. Since I was motivated by a larger objective (my love for southern gospel music), I didn’t let problems in the business, or even distance from my home, dissuade me from taking the plunge. Within four years, I sold the business to a publicly-traded company that made an unsolicited offer I could not refuse.

The moral of my story, and how I encouraged Randy: find the intrinsic motivation (the why) that drives your desire to buy a business. That’s the only way to focus your search and see opportunities, not just problems.

 

JIM CUMBEE is President of Tennessee Valley Group, Inc. a retainer-based business brokerage and transition mediation firm in Franklin, TN. Cumbee is an attorney and has an MBA from Harvard Business School. He has a wide range of corporate and entrepreneurial experiences that make him one of the most sought-after business transition advisors in the state of Tennessee.

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Tennessee Valley Group

Jim Cumbee established Tennessee Valley Group to help business owners fulfill their dreams for life after business ownership. It’s a mission that his 30+ year career history had prepared him well for—in addition to being an attorney, transition mediator and business broker, Jim has been a buyer, seller, and entrepreneur. His broad range of experience gives him unique insight into how business buyers and sellers can achieve their goals.

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