3 Questions to Ask Yourself Before Buying a Business
The startup and entrepreneur world are filled with buzzwords like pivot, scale, lean, value propo – actually, just watch HBO’s Silicon Valley and you’ll get the gist.
If the last three months have taught business owners anything, it’s that many entrepreneurs have had no choice but to put these words into action – most of them just to stay afloat and survive.
For those acquiring a business, the challenges that come with socially distancing can mean further delays and more hoops to jump through (and a lot more Zoom meetings).
But, the silver lining is there. Here are three lessons we can all learn, entrepreneur or not.
Trust will keep things moving
Entrepreneurs and investors Evan Schumman and Marisa Sergi were in the middle of acquiring Sergi’s family winery, L’uva Bella, when COVID-19 hit.
“Our momentum came to a screeching halt,” said Schumann. “When the COVID-19 pandemic started, everything started snowballing. Every bank in the country was scrambling to keep up with SBA PPP loans, and our deal was left on the sidelines.”
What gave Schumman hope when the headaches started piling up? Trust.
“Make sure you trust, respect, and like your lawyer, because he or she will be your best friend for a while,” Schumman said with a laugh.
When acquiring a business, it’s good practice to ask yourself three questions in regard to trusting the people you do business with:
- Does the deal benefit both parties for a win-win situation?
- Does the reward outweigh the inconveniences and risks?
- Is the person you’re doing business with responsive and transparent?
Embrace the stress test
Acquiring a company, or dare I say, pivoting or scaling a company during COVID-19, is a priceless education. Most worst-case scenarios are kept in a binder collecting dust. Now, companies and founders alike are founding out just how strong their business – and their mental toughness, is.
“These past few months have brought about some intense emotions,” said Sergi. “I know Evan and I, as founders and people, will be wiser in the long run for experiencing this, but it’s taken a toll on us for sure.”
There’s not an MBA program in the country that can duplicate the hands-on education we’re all getting right now. Maybe it’s an education nobody wanted, but the learnings have been invaluable. And it reveals many of us might be more creative than we think.
Everyone is a creative
COVID-19 has shown us that you don’t have to work in advertising or even be a writer or designer to be creative.
Parents are finding ways to entertain their kids, restaurants are finding ways to get food out the door, and entrepreneurs are finding out how to put those words like pivot and scale into real-world situations.
This pandemic is challenging, but if we’ve learned one thing, it’s that people, and entrepreneurs, can evolve. And building trust, embracing stress tests, and getting creative are great places to start.