A d d u c e n t

If you’ve read my other articles, you probably can tell that I tend to emphasize that knowledge, preparation, planning are important parts of succeeding in starting or buying your own business (or businesses). 
 
In this article I'll talk specifically about how buying good solid businesses helps the economy.  I hope you will read it completely because it has some things for you to think about if you are seriously interested in taking your financial security into your own hands by buying your own business or businesses.  Buying and having your own successful business is one of the best ways to increase your personal wealth and make yourself financially secure.
 
The Big Picture
 
There are hundreds of thousands of businesses for sale each year; hundreds and thousands of good solid businesses are overlooked by buyers. 
 
Why are they overlooked?
 
Most private equity firms and many other types of buyers, all chase the same types of business to buy.  Sexy, tech-heavy, high growth ... already established sales revenue of more than $10 million.  And they really aren't too interested unless their revenues are greater than $15 million.
 
What does that mean? 
 
It means there are a whole lot of businesses out there that won't find a buyer because the typical buyer in the market is not interested in them and 90% of the other buyers don't know how to find them or think they don't have enough money to get a deal closed.
 
I've worked with many buyers just like what I described above. 
 
I've also worked with some, like one company that grew solely through acquisition, from a small, newly public company (founded by a group that bought three small businesses and merged them) with about $15 million in sales and grew through acquisition to over $600 million in sales ... in 7 years.  Their stock grew from $2.88 to over $22 during that period.  It is now trading at $39 per share.  By the way, the buyer that bought the original three small companies did not put any of their own money into the deals (the used other people’s money) and all the subsequent acquisitions were paid for in their public company stock and cash created from the business being acquired.  The original buyers are now worth hundreds of millions of dollars and their initial staff is worth tens of millions of dollars.
 
I've seen many good, solid, well-established profitable businesses get passed over. 
 
I often get unsolicited letters from business owners.  Actual snail mail letters not emails.  From business owners who heard about me and want to know if I would be interested in their business.  One wrote me because he had heard that I inquired about a business for sale that was similar to his business. 
 
He's a small manufacturer, been in business for 53 years, 83 years old and does not have anyone to turn the business over to.  I called him and he was an intelligent gentleman with a stable business, loyal customers, loyal employees ... even has a couple of patented products that he's never pushed to grow their product line so there is upside potential.  He and his wife want to retire and enjoy what time is left for them.  A few years ago, a son-in-law who was going to take over the business, died of cancer.  So he had to stay on in the business because he did not want to let his employees and customers down.  And he has yet to find a buyer.  This owner is motivated to come up with a way to exit the business.
 
The other letters I have tell a similar tale; the owners are getting old, some have health issues, all are ready to sell and retire but no buyers have approached them with interest.  If I tried just the slightest bit, I could find a hundred or more in the same types of situations.
 
It's true that you cannot structure a deal/suitable offer on every business that you look at or are interested in.  There are businesses out there may not be viable situations and therefore not "buyable" for you. I'm not suggesting that you spend any time on those and in our book you can learn how to quickly determine what is viable and deserves your attention and what does not.
 
It's equally true that you will find solid businesses, with great management and tremendous potential that are outstanding opportunities for you!
 
I guarantee you there are so many businesses out there that are viable, good solid businesses that you and I will never run out of candidates for our buy-out efforts. 
 
Many will be "diamonds in the rough" just like the man with the small manufacturing company and two patented products that I mention above.  A thousand buyers doing what we can do would still not deplete the supply because every day, month and year ... it replenishes itself!  Businesses of all sizes have owners that get a little bit older and motivated each day to sell their business.
 
My philosophy is this (and it is why I decided to write my business-buying book):
 
If I and other buyers who know what to look for, know how to structure, negotiate and finance deals, can find these solid money-making businesses and keep them operating as valuable members of their community and as essential components of the strong core of our economic infrastructure then business-by-business, piece by piece, we make our country stronger.
 
And I know that a practical approach to buying businesses can be taught to others so they can tap the vast amount of opportunities that are out there. 
 
By creating more capable buyers, it will help them create their own financial security and wealth ... and in turn maintains stability so that businesses are not left to stagnate or decline, moved elsewhere or simply shutdown for lack of a buyer. 

It works out best for everyone.
 
That is why I see the "business" of buying business as a perfect (in all ways) means of wealth creation.