Leap of Faith: Will You Actually Buy a Business?

Revealing the Secret Sauce for Execution!

There are two things that an Acquisition Entrepreneur needs to close on your first business.
When buying a company, especially for the very first time, there’s one thing that rules over that decision process and experience.
Uncertainty.
In other words:
“What are the things that you don’t know about the business?”
“What are the things that you weren’t able to pull out during due diligence that are going to impact your decision later?”
I’ve heard it said that before closing the buyer has all the money and none of the information and the seller has none of the money and all the information.
After the transaction, the buyer has none of the money & none of the information and the seller has all the money and all of the information.
It’s not exactly accurate but it’s directionally true, right?
There’s always this component where the buyer is having to take a risk – a leap of faith.
In order to execute, you need to have the courage to make that leap of faith.
There are two things that will help and two things that need to be kept in check.
By the end of this story, you’ll have the tools that you need to move forward, know what is normal and true, and recognize the things to pay attention to.
The first time I closed on a business as well as the second time I closed on a business, my heart was pounding with fear while signing those documents. I remember having to breathe and reassure myself since it was a huge personal guarantee. It did start to get easier after the 2nd closing.
When you’re buying companies, if you’re young and don’t have a lot to lose, it may be easier to be willing to take these significant personal guarantees to acquire your own business and keep all the equity. That’s really what worked for me.
While it does get easier, that’s only because as you do it, you gain more and more confidence in your ability to actually buy a company and see it through to the end.
When it comes to the difference between searching and actually closing, there are two things that you need to be focusing on.
  1. Persistence and the ability to pivot.
My 8-year-old daughter is so persistent that she definitely eats more cookies, more desserts and watches more videos than her other sisters. That’s because she stays on you. She knows what she wants. She works to get it.
That’s persistence. Commitment to the goal and staying after what it is that you want.
In Entrepreneurship, we say, “I’m a hundred percent committed until the world, or the customers, or the data explains to me that I need to change what I’m doing to accomplish that goal.”
Having that persistence towards the goal and that ability to pivot is really a commitment towards getting it done.
  1. Self-belief
Do you believe in yourself like really believe in yourself? Cause this gets hard.
The thing is that when you have a high level of self-belief, anything is possible. And if you don’t believe that the world is malleable and that you’re the one to solve this problem then you probably shouldn’t go down this path.
Without it, you can’t achieve anything but with it, anything can be achieved.
These two things are what is going to get you over the gate.
Now, the things that we want to keep in check are also critical for success.
Fear, doubt, and uncertainty will always be present in your decisions to acquire a business because the stakes are high. Some are putting in their whole net worth or beyond.
The key is embracing and acknowledging fear of failure and doubt. Both can and should be confronted. They are immensely useful tools.
When I’m working with buyers, they get stuck in the analysis. This is especially true for first time buyers. They get stuck in trying to explain to themselves why they shouldn’t do it. Or trying to understand the business model of acquiring businesses and spending a lot of time in the spreadsheets running numbers.
The thing is you need to acknowledge the fear of failure. You need to acknowledge doubt. You need to look at where is this business could possibly fail and ask yourself “Do I feel like I can navigate us through that?”.
Embracing fears and doubt is critical to making good decisions.
If you don’t incorporate them into your decision-making process, they end up ruling the decision process. That fear of failure and doubt will convince you that you cannot close on this business.
Keep that in mind.
Possibly the biggest part of closing deals is simply being able to take that leap of faith.
If you plan on buying a business in the next 12 months, please consider applying to the Acquisition Lab. We have a vetted group of buyers and a do-it-with-you buy-side advisory service. Please feel free to apply and get world-class education, support from our team of advisors, and a suite of tools and a vetted community to help you succeed in that first acquisition or in implementing a grow-through-acquisition process.