Platt Perspective on Business and Technology

Should I stay or should I go? 23: selling-off and buying out an already established business 3

Posted in career development, job search, job search and career development by Timothy Platt on July 30, 2016

This is my 23rd installment to a series on intentionally entered into, fundamental job and career path change, and on best practices for deciding both when and how to carry through on it (see Guide to Effective Job Search and Career Development – 3, postings 416 and following for Parts 1-22.) And this is also my third posting to this series on buying or selling a small business or professional practice as a next step career move.

I began discussing the finances and issues that impact on them, of buying out a small already established business in Part 22, beginning with a long-term strategic perspective and the question of meeting more than just immediate, here and now needs and desires. Then after framing this line of discussion in a longer-term career context I began to consider some of the more immediate here and now concerns that would arise when vetting a possible career move here as a practical possibility.

My goal here is to build from that admittedly more accounting and bookkeeping start to this vetting process, and both in deciding if this type of business acquisition is a good move for you in general, and in determining whether or not a specific business that is for sale would be the right choice for you.

A big part of this decision making process has to be bookkeeping and accounting in nature:

• Where you gather relevant information as to your own funding capabilities and the risks that you might face from investing them in this,
• And relevant information as to the overall costs that you would have to cover, and over what timeframes and with what overage: what cost overruns prudently allowed for.

Funding resources, as noted above are also timeframe-defined as you are not probably going to need to have the liquidity immediately at hand, to meet a specific expense due in purchasing and (re)building for a new-to-you business, until that expense is actually due and with whatever terms of payment scheduling that you can arrange for there.

And your overall funding capability as held in liquid and readily-liquid form has to actively take into account the fact that buying and refurbishing or updating a new-to-you business and making it your business is only going to represent one priority and need that you will also have to be prepared for. If you are going to have to draw down from your life savings and investments, significantly draw from any current income coming in – or more likely take from both for this, what would that mean for your other current and long-term, and even post-retirement needs? Focusing on you’re here and now in more detail for the moment, how would these anticipated expenses and any readily anticipated percentage of added costs there, impact on your meeting your more immediate living needs, and on other significant if perhaps more one-off expense possibilities such as buying a new car that you also need, or taking a vacation or meeting some other quality of life need?

I said that I would continue outlining at least key considerations in a cost-based needs and opportunities analysis here and I have been doing that up to here with these notes. But perhaps more importantly, I also began addressing non-financial considerations in Part 22 and continue that here too, and certainly if this type of career move looks like it could be made to work from a more strictly financial perspective. That still leaves the open and largely unconsidered question of whether this would be a good move for you. And as I added at the end of Part 22, that is where clearly understanding your goals and priorities enter this narrative too, and with some seemingly simple questions that in fact demonstrate in practice, how the devil can be in the details:

• What is most important to you in taking over a business and being your own boss in it?
• And which of your wish list goals and preferences in this might be nice, but be more incidental and negotiable?
• And how much of the anticipated costs faced in this initial cost estimation, would likely come from those nice incidentals and how much of it would come from what to you are the essentials?

My goal for the remainder of this posting is to at least begin to address these questions. And I begin considering them and their possible answers in timeframe terms, and essentially exactly as I have done so far here, and with two new questions:

• Do you look at taking over an established business or business practice in this way as making a long-term commitment that you would work at for a significant number of years as part of your overall work life?
• Or do you see this as more of an ending career move that you would pursue for a few years as you tapered off your work life, and ideally in a more relaxed smaller community where you would not have to face long commutes or cold weather winters? Then and according to this scenario, you would sell off this business too, or at least step back from its more day to day management and operations as more of an investing owner with a hired on-site manager or business partner in place.

Be realistic here; whatever your overall long-term plans and goals, if you take on a new-to-you business in this way you have to be prepared to take it on as a long-term hands-on commitment on your part. Do not assume a rosy scenario in which you might make a larger hands-on effort at first, up-front and then be able to step back and treat this as more of a business investment that in some way can be brought to in effect run itself. I also recommend against this career move and categorically if it would be taken as more of a bucket list, “I have always wanted to …” entry that you would try out hands-on and then move on from. I do recommend pursuing this approach if it addresses a long-felt need that you would have a driving commitment to follow through upon and as a genuine longer-term career step.

• The finances have to work for you here, and this has to be able to work within your capacity to invest of your time, energy and effort too, and with enough of all of these resources left in reserve and left available for the rest of your life so as to make this venture worthwhile. But you also need the less quantifiable drive to actually do this and to follow through on it – and even when (not if: when) you find yourself facing unplanned for delays, expenses and other obstacles.

I am going to switch sides of the negotiating table in my next series installment to consider all of this from the seller’s perspective. And both timeframe and non-monetary considerations enter into that too and particularly when this means selling off and stepping away from a business or business practice that has come to hold life-defining meaning for you and for who you are, and both as a professional and as a person. Meanwhile, you can find this and related postings at my Guide to Effective Job Search and Career Development – 3 and at the first directory page and second, continuation page to this Guide.

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