When you hear the word “business,” what comes to mind?
You might think of a CEO with a five-figure salary, or an entrepreneur who made millions through hard work and luck. Or maybe you have a negative view of business because someone told you it’s always about taking advantage of people for profit.
Whatever your thoughts on business are, let me give you some food for thought: I bet at least one person reading this article has recently bought something from a big box store like Walmart (NYSE:WMT). If that’s true, then congratulations; you’ve just contributed to America becoming one of the biggest consumers in the world!
To put it bluntly, if you don’t want to be part of the problem, you have to get out of your comfort zone. No matter what career you chose, there will always be some sort of business involved in it. When you’re searching for a job, don’t think about whether it’s “just” business; instead, consider how much value your work contributes to society. After all is said and done, that’s probably more important than how much money someone pays you.
Now that I’ve got my soapbox out of the way, I’ll actually talk about business in this article. But first…
Do You Know Who Is Going to Buy Your Business?
For most people reading this article, the answer is “nobody.” That sounds harsh, but it’s the truth. In fact, most companies fail because no one wants to buy their product or service.
Let me rephrase that: almost everyone starts a business because they want to make money by selling something, but very few actually think about how they’re going to do it. As a matter of fact, during my time with a business broker here in California, I’m surprised at how many people come into his office asking him if he can help them find someone who is interested in buying their business – without having any idea what kind of buyer might be out there!
It’s not surprising why so many businesses don’t sell . If you can’t describe your customers as well as you can describe your product, how is a potential buyer supposed to know they want to buy it?
If you think in terms of percentages, most businesses that sell do so because they were in the right place at the right time. For example, an investor might have been looking for a different type of business and came across your company when they weren’t even planning on buying anything. By chance, your product or service caught their attention and made them interested enough to get involved with your business.
In my experience as a broker , opportunities like these are few and far between. Getting lucky once doesn’t make your business more attractive to buyers; you need to be constantly improving yourself and the value of what you’re offering if you want another shot at getting lucky.
If you look at the statistics, it’s easy to see why most businesses do not sell . According to The Wall Street Journal , approximately 2% of privately owned companies are ever sold ( 2013 ). Now let’s focus on the bigger picture: only about 12% of all U.S. companies make it past their tenth year (Small Business Administration). With numbers this low, how can you expect your business to have a buyer lined up by the time you’re ready to retire?
Since competition is slim, developing relationships with potential buyers can be very fruitful for both sides. The trick is that you need to find people who are interested in buying what you have without knowing they want it beforehand. How are you supposed to do that? The only way I know is by solving problems for your customers.
Know Your Customer
Nobody likes when they’re waiting in line at the store, especially in a big box retailer like Walmart. That’s why self-checkout lines are becoming more popular. They save people time and give them the freedom of buying what they want without having someone watch over their shoulder like an underpaid babysitter (I think we can all agree that no one likes being watched while they shop). But there’s another reason why so many businesses are moving toward self-service.