7 Qualities of a Qualified Buyer
We’ve discussed questions buyers need to ask themselves before buying a business and we’ve also talked about three things that can help buyers make a great start after they buy a business. Today we’re going to talk about the qualities of a qualified buyer. The more of these you have, the higher your chances of being successful in business ownership.
An Entrepreneurial Spirit
You don’t have to have owned a business before or even run lemonade stands when you were a kid. Entrepreneurial spirit is about questioning the status quo (could this be better?), seeking growth and understanding (not just continuing education that you have to do, but general enrichment that you choose to do), and taking on challenges and opportunities (always being open to doing something new).
An entrepreneurial spirit, even if you’ve never been an “entrepreneur,” is key to business ownership.
A Management Background
You don’t need to have managed teams of hundreds or dozens of individuals. Even managing a handful or one person will open you up to the challenges of communicating with a different person, taking into account his/her personality, working style, and level of motivation.
Those who “don’t like managing people” won’t do well in business ownership.
A Willingness to Lead
Not every leader seeks out leadership. Cincinnatus famously was working on his small farm when he was appointed dictator to help rescue Rome. He defeated the enemy in a single day, celebrated a triumph in Rome, then went home to farming. He didn’t seek leadership, but when it came to him, he embraced it (and saved Rome).
Many consider themselves “reluctant” leaders. That’s okay; business ownership will give you the opportunity to put that reluctance aside and embrace the personal growth that comes from exercising your leadership muscles.
An Ability to Look at a Broad Range of Activities
A day/month/quarter/year of a business owner has regular cycles of things that will require knowledge and expertise you may have to develop.
Perhaps you’ve never looked forensically at books and budgets before. Or you’ve never iterated through a marketing and PR campaign for a business. Or examined SaaS products to see which has the best value for your business. Or run payroll. Or managed vendors.
You’ll have to do at least some of these activities as a business owner, and that means in some cases you’ll be starting from scratch. Bring humility and a student’s attitude of “always be learning” and you’ll be fine.
Support from Your People
Sometimes you’ll have opposition to business ownership from some people in your life, and that’s healthy to an extent. You need people pushing back so you can better articulate your reasons for buying a business. But if you have opposition from a spouse, for example, that’s a red flag.
Get signoff for your major life decision of buying a business from the people who are major in your life.
Comfort with Making Decisions with Incomplete Information
While some people can make decisions before they’re even asked, and others need all of the research possible and then years to ponder that info, business owners are often in between those extremes. They will be asked to make decisions and will be given some time to make them, but they often will not have all the information they would like, sometimes because it’s not available (“Will this marketing campaign work?”).
Business owners already have, or are open to acquiring, the ability to make decisions when needed, knowing that sometimes the wrong decision will be made, and out of that should come a lesson, not regret.
Knowledge of Industry
Of all the ones we’ve listed above, this is the least necessary, but it would be foolish for us to say that industry knowledge isn’t a major advantage, if you have it. The only caution we have here goes back to the idea of continuing ed and a student’s mind. Don’t ever get complacent about “what you know” and be open to the fact that there are things you don’t, even in an industry you may have worked in for decades.
If you like what you read here and want to listen to a podcast discussion on qualified buyers, you can find that here. If you have several of these qualities, we’ve got businesses you should take a look at. Give us a call.
