The Tribune

By Simon Cooper


Res Socius

Quite often people ask me why I broker business sales, when they think it’s almost easier to start one up themselves.

The answer’s quite straightforward really, when you think about it.

Not everybody has what it takes to begin trading.

Buy a business and most of what you need should be included in the deal.

Starting a new business from scratch involves attracting customers. The problem is that they’re already committed elsewhere (unless you stumble over a totally unique idea). Therefore, you’re going to need an exceptional discriminator that draws them to you. Be prepared for cutthroat competition from those already in the market. Of course, you could buy an existing business with a loyal following. Your call. Every business needs special skills. These include general business knowledge (a graduate diploma is
insufficient, trust me) but also product-specific knowledge too. That’s why successful franchises don’t let a new franchisee loose without extensive training. A great recipe for failure is thinking it’s all common sense and you’ll learn it as you go along. Buy an existing business, and the knowledge should be included in the deal. Your call. It takes time to get a new business going, and needing time implies having patience too, and lots of it.
 It can be painful watching your reserves run out, and tempting to take a final gamble. Chasing cash flow is the nightmare that drives new business owners to despair. Of course, if you decide to buy an existing business, then everything should be already up and running, and churning profits out. Your call. Beginning a new business invariably costs a deal more money than expected. There are two reasons for this.
 Firstly, we’re an optimistic species and - generally speaking - tend to underestimate. Secondly, the tide always goes out before it comes in again. This means that you will inevitably make an initial loss that hopefully turns to profit soon. Of course, when you buy a running business you should inherit a profitable situation, and know exactly what the exercise is going to cost you, in advance. Did you spot my deliberate use of the word “should”? That’s because there are some sharks in the ocean out there hunting for your money, and not everything’s always as it seems to be. Purchasing an existing
business through an intermediary broker guarantees that somebody independent has already looked at it, and is willing to risk their good name. I’ll say it just one time more. Your call.

NB: Simon Cooper is a founding partner of Res Socius, a business brokerage firm and businesses for sale directory service. Res Socius is authorized by the Bahamas Investment Authority to facilitate the sale and purchase of businesses and provide consultancy services. Contact 376-1256 or visit www.ressocius.com.