Why having a support network is so critical when looking to buy a business
By William Fry
Jun 27, 2024
The journey to buying a business can be long and lonely. According to a 2023 study on self-funded searchers, 53% of folks buy a business within 12 months of beginning to look. But the remaining 47% can take up to 2.5 years, if they buy at all.
Of course, how long it’ll take you depends a lot on how selective you are being:
Does the business need to be located within a 30-minute drive?
Does it need to be large enough to pay you a $175K base salary?
Are you only looking for businesses with long-term contracts and recurring revenue?
Along the way, it’ll often be tempting to force a deal to happen. But the risk here isn’t worth it. You’re often signing up for a personally guaranteed SBA loan, and at least a 7-year journey. Saving a few months isn’t worth a train ride through hell.
Lastly, the journey from operator to owner covers a lot of ground. You’ll find yourself trying to become an expert on various industries, looking at different deal structures, reading up on key legal terms, and more.
This is where the value of a support network comes into play. The ideal network includes fellow SMB operators planning to buy businesses as well as a few seasoned owners who can help you review and negotiate deals.
For those looking for businesses in specific industries, it’s ideal to have a few owners in your corner who can quickly spot check your deals. For those who are more generalists, the ideal owner is one who’s bought a business himself.
This is one area that we’re investing in at Mainshares – helping put acquisition entrepreneurs in touch with one another for peer support and matching them with successful owners for mentorship and support.
Information posted on this page is not intended to be, and should not be construed as tax, legal, investment or accounting advice. You should consult your own tax, legal, investment and accounting advisors before engaging in any transaction.
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