The other day a fellow I was consulting about buying businesses kept asking me why it's so important to keep the management in place after the sale. He kept asking if he couldn't make more money if he just stepped in and did it himself.
I told him he can do that, but he's probably going to end up pulling his hair out. And even if he doesn't, then he's going to be jeapardizing the company's profits and probably...even his own future pay checks.
Listen: If you want to truly live a life style other people salivate at the thought of, rake in a fat chunk of money each and every year with a minimal amount of stress and worry, youve got to make sure the management stays. Even if it means offering them more money.
Now, bear in mind, this doesnt happen very often -- where you have to beg people to stay -- because most of the time the management in these larger companies are very happy with their jobs. And when I'm looking at businesses, Im looking for some owner thats never there. Someone who is out playing golf and who flies in once a month for an hour. With the management taking care of everything the rest of the time.
And that's what I told this guy he should be looking for, too.
Unfortunately, like most people wanting to buy a business or go into business, he was trying to use his so-called business "common sense", and is telling himself he needs a business where he has to work 80 hours a week to control the thing.
In my humble opinion that's just stupid.
If youre doing that -- if you're looking for that kind of business to buy -- that means theres two people you should be hiring to replace you, maybe three people, and take it easy. The reason most people dont do it my way, and don't take my advice on this is probably because they want more money out of the company. But the hard reality is that if they don't know how to manage and run the thing better than the managers who are already running things, they will probably end up losing money in the end. |
