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Buying a Business Has Ups and Downs

October 1, 2016 -

Buying a BusinessI mentioned before that I was working on a new startup. As part of that, I am looking to accelerate growth by buying a business. Unfortunately, earlier this week, I found out that a company I was looking to buy signed a letter of intent with another buyer.

I am not completely surprised by this as I discovered this opportunity only recently and late in the process. What does surprise me is that they started initial discussions with me and didn’t tell me that they had another buyer further down the road ready to make an offer.

I have acquired dozens of companies over the years on behalf of my employers. It’s a different experience when buying a company for yourself. It’s difficult to stay unemotional and detached when it’s your money on the line and you’ll be responsible for running the company after the transaction is completed.

The one thing that’s the same is that sellers want to maximize their profit from the sale. This doesn’t always mean they take the highest price, but it does usually mean that they entertain all serious offers.

In this situation, the owner is retiring. And by accepting another offer without even hearing what I had to say, he probably left money on the table.

For me, it’s not the end of the world. While I liked what I saw about this business, there will be others.

My old boss used to say, sometimes the best deals are the ones that you don’t do.

There is still a chance the deal with the other buyer falls apart. In which case, I’ll take a more detailed look at the company and decide if it’s worth pursuing. But if the deal falls apart, I will want to know much more about why it happened.

Until then, I’ve got my eyes on a few other opportunities. Maybe I’ll wind up liking one of them even more than this deal.

Either way, it’s fun being on the hunt for something new.

 

Financial Slackers, have you considered buying a business rather than working for someone else?

 

About Financial Slacker

After over 20 years in the corporate world, I realized that I was a Financial Slacker. I spent all my time making money for others rather than for myself.

So I decided to make a change.

The good news is that despite being a Financial Slacker, I had saved and invested enough that I didn't need to worry about retirement.

But I wasn't ready to retire so I decided to start working for myself applying everything I knew about business, finance, and investing.

I launched Financial Slacker not just to share what I have learned along the way, but also to connect with a community of like-minded people discussing financial independence, investing, entrepreneurship, and much more.

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Reader Interactions

Comments

  1. ambertreeleaves says

    October 2, 2016 at 12:57 pm

    Sounds like great fun.

    Agreed with you: sometime the best deal is the deal you did not take. On a smaller level, I had a drink with a former colleague the other day and he discussed 2 jobs he was looking into. Both turned out a no go. And from all experiences he learned a lot. Our conclusion was that the logo was the best result for him

    good luck hunting

    View Comment
    • Financial Slacker says

      October 4, 2016 at 12:54 pm

      Thanks ATL. It’s not a quick process, but hopefully it pays off in the end.

      View Comment
  2. The Green Swan says

    October 3, 2016 at 12:14 pm

    Sounds like an exciting process for your, and interesting how you have history with acquisitions through your prior employer. I’m sure that helps in screening potential targets. I’d love to hear updates in the future, best of luck!

    View Comment
    • Financial Slacker says

      October 4, 2016 at 12:53 pm

      Thanks Green Swan. I’m working on a few more opportunities as we speak.

      View Comment

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