One of the most disturbing facts that I discovered working in business brokerage is that something like 80% of all small businesses never find a buyer when the owner decides it's time to retire or simply move on. The 80% are then simply shuttered after what at best can be called a "fire sale" of inventory, equipment, and fixtures. A broker's most unpleasant task comes when he has to inform a business owner that there is really nothing to sell. This can be downright painful when the owner is in their 60s or 70s and hoping to walk away with a million or more for their retirement after building the business over 20 or 30 years.
Larger companies fare much better because they are perceived as true businesses. They come with professional managers and the critical mass necessary for survival. In contrast, the small business is often perceived as little more than a job with a lot of additional responsibilities. Moreover, their fate is considered to be tied too closely to their owner. If the owner pulls out of the picture there is usually an exodus of customers or clients large enough to kill the business within a couple of months.
Think of it this way, would you pay $240,000 to buy a job with an annual income of $80,000? It's unlikely when you consider the additional risks and responsibilities that come with running a small business. In addition, few people have that kind of money. When they do have it they expect something more substantial and profitable.
Why Study the High Growth Strategies of Tycoons?
How does a business owner avoid the risk of investing many long years into building something that no one will be willing to buy? The solution is to understand what makes a business attractive to buyers. The best teachers on this subject are the Gold Medal Winners of the business world: tycoons.
What is the Secret to Making Business Building Pay Off?
The secret to having a big pay off for your efforts is to build something that can be sold to the best buyers out there. The best buyers are a corporations a level or two above you on the industry pyramid. These buyers typically have the deep-pockets necessary to pay the highest prices and have better things to do than to try to nickel and dime you to death.
Once again, tycoons are the champions at building businesses that can be flipped to much larger corporate buyers.
And that's why The Tycoon Playbook came to be. You can now learn to build something that can be sold eventually for top dollar instead of just shuttering the your business.
