Grow a Business or Buy a Business?

Growing a business or buying a business is something that not many entrepreneurs have considered. Buying and selling small companies is a pretty inefficient asset class. Finding the right one can be quite hard. It is not very easy to know what business you are in. One thing is for sure, money is made on the buy, and you surely want something at a fair valuation. As Warren Buffet said, “I’d rather have a great business at a good price than a good business at a great price.”

What Warren Buffet meant was a sustainable competitive advantage will always be worth more than an average business. You have to look at a company with a mindset of finding business at a fair price. Freedom Factory, a top brokerage firm, specializes in selling great companies. Finding a great business at a reasonable price makes much sense.

Should you wish to leverage your business, there are two things to consider:

  • Complimentary product/complimentary customer set – For example, you are in the business of selling phones, and you plan to buy a headset company as your existing customers would be interested in it. You could get at least a 20% take rate on that, which will enable you to pay your business in less than a year.
  • Stupid human trick – It pertains to one thing you do better than anybody else. You probably have heard of the 80-20 principle, where 20% of your work delivers 80% of your results. Using the stupid human trick or the one thing you are better than anyone else, you could break the 80-20 principle and turn into 95-5, where 5% of your work delivers 95% results. If you could do that 5% 20 times, then you could replicate your results 20 times – it would increase your business worth by 20 times more. That’s superb, and many business owners dreamt of that.

Deciding to grow a business from scratch or buy an existing business is a pretty huge decision to make. There are pros and cons – but it boils down to how much work and money are needed to grow a business. If you want to sell your business, but it’s not been doing well, and you are afraid that nobody might be interested in your business, or you couldn’t sell it at a maximum fair value. All you need to do is to contact Robert Hirsch of Freedom Factory.

Watch the video here:

Robert Hirsch is a serial entrepreneur, and selling businesses is what he does best. He can dramatically shift the line by fixing sales and marketing problems. Using his stupid human trick, he can make a huge difference in your company. He always sees things as the money’s made on the buy. There are many great businesses out there, and you can certainly find businesses that are complementary to yours.

If you have not found your stupid human trick, do not lose hope as there are many tools for that such as Kolby and Meyers Briggs. Take the time to find out what you are best at and use that to leverage your business. If you need help in deciding whether to grow or buy a business, feel free to contact Robert Hirsch. His company, Freedom Factory, is designed to help businesses come up with the best decisions that could positively impact not just businesses, but life as a whole.

 

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