BROKER'S BLOG

The Millionaire's Club

November 19, 2008
Ken Elkin, Broker/Owner Acquisition Experts LLC.
To contact, comment or respond, ken@acquisitionexperts.net

I saw an article recently that had an interesting statistic - 50% of all existing US millionaires made their money running their own business. Statistics have always fascinated me. Compare that statistic with the famous truism we often hear - "9 out of 10 new small businesses fail". These are two very different "clubs" whose members are small business owners. Obviously, we prefer to help our clients join or stay in Club #1 (through the sale or purchase of an existing business) and avoid participation in Club #2.

I believe a great many prospective business buyers are confused about RISK. They tend to equate risk with the AMOUNT of money to be invested, not the PROBABILITY of succeeding and earning a desirable return on that investment. This is part of the classic "Build vs Buy" decision. It is certainly riskier to start a business from scratch than to buy an existing successful business with proven products, services, systems and relationships. The amount of initial investment may be less for a start-up (or to buy a very small existing business), but the odds of failing and losing that initial investment are, generally speaking, much higher.

Which investment has more risk: $50k invested to start a business with a 90% chance of failing or $250k invested as a down payment on an existing business with, say, a 90% chance of succeeding? Buying a successful business of a minimum size - with good people, systems and customers already in place - greatly improves the likelihood of substantial success. The investor buying a proven established business may indeed put more money at risk, but the odds are much better that initial investment will enable membership into "The Millionaire's Club"

Sharing Philosophy

November 7, 2008
Ken Elkin, Broker/Owner Acquisition Experts LLC.
To contact, comment or respond, ken@acquisitionexperts.net

We live in the trenches, putting together deals every day and maintaining relationships with literally thousands of business owners and prospective buyers. We have gone through difficult negotiations side-by-side with our many clients. Sometimes we learn as much from them as they learn from us. We've shared in the pain of hard lessons learned. We've celebrated great achievements and dreams realized. We see the difference between success and failure and even mediocrity. The real difference makers are often "between the lines" - an attitude, a philosophy, an approach - that separates the winners from the losers. We would like to share some thoughts and observations that may hopefully help you in the pursuit of your significant life goals.