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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 14977  
Subject: Re: How can I GET an existing business Date: 8/5/2004 12:45 AM
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Hi Duckster,

So is there any other ways you can think of where I can get my foot in the door? (Besides nagging MrsDuck?)
All responses are appreciated, but I might get defensive. But at least I'm aware of it.


You serious? Like "serious" serious?
I mean, like "no joke.. heart attack" serious???

Here's my no bull sincerest advice;
(Come close & listen carefuly..............)























ABSOLUTELY, UNDER NO CIRCUMSTANCES, SHOULD YOU BUY ANY BUSINESS YOU HAVE NOT ALREADY RUN!!!!

What I mean is;
MANAGING a business is a job, NOT an "investment"... and one that is NOT easily learned (take it from someone with scars to prove it!)

It is *easy* to "hire" yourself as a "manager" by buying the company that will hire you... and if you do, and you have no experience in the position you just 'hired' yourself for, you JUST FAILED the first test of management!!!

Never, Ever, EVER hire someone for a position they are dramatically under-experienced & under-qualified for! Hire first to the LOWEST skilled position, and train & grow them upwards from there!

THIS APPLIES TO YOURSELF AS WELL!!! Do not "hire" yourself for the top position (or even a middle position) if you know you have insufficient experience & skillsets for that position!

"Owning" a laundromat is an example I can speak of from personal experience. When I was 18 my Dad bought a laundromat (quite to my Mom's semi-supportive chagrine, not unlike the sounds of Mrs. Duck.) For the first year, or so, the whole family was involved... then it started getting old. I ended up carrying the daily maintenance responsibilities, and coordinating & managing the logistics. I learned from the "gutter" up, and there is a LOT involved with that business!

3 years after we bought it, my Dad sold it.... and had the 'privilege' of having to bring over $10,000 to the closing table just to get it out of his name... that's a LOT more than a $10,000 loss... that's a family spiritual & morale DISASTER!!! I washed away about another $5,000 of IOUs from my Dad for my accumulated payroll...

Why did it fail? Financing, mostly! The focus was always on the front-end... keeping it clean & repaired... keeping the winos from camping out (it was in East LA,)... keeping promotional flyers spread around the rental neighborhoods....

It had the traffic & the business volume... BUT the killer ended up being that neither Mom nor Dad had any idea how to manage the OVERHEAD. They didn't know that ongoingly negotiating terms on supplies and technical service was a critical part of retaining revenues (which are never profits until AFTER all regular and surprise costs are covered.) They didn't know about using seller-carried notes for the purchase, and rolling them strategically over time periods. They didn't know about vendor-support marketing and trial comps.

They were thinking very simple;
Buy a 'going concern business' and simply plug the nickles in the slot, and pull the lever... keep it clean & do it over & over....

Great in concept... HOWEVER... in the real world, it is far more complex. NOT using leverage can kill you. OVER-using leverage can kill you. NOT knowing how & when to be cutthroat in negotiations (ongoingly) can kill you. Being an a-hole to the wrong people (because you're not paying attention) can kill you. Being too nice to the wrong people can kill you....

*AND*... yet you can look around and SEE clear & obvious examples of successes... people who are nice... people who do not seem cutthroat or unfair.... people who aren't pretensious... who don't operate laundromats while driving Mercedes, etc.......

You'll think; Why can't I be just like them? If THEY can do it, *I* can do it!!!

And you would be CORRECT!!!!!

HOWEVER.... if you "look under the hood" each & every one of them will have had SOME kind of relevant experience that taught them the ropes of THAT SPECIFIC BUSINESS before they ever acquired the highest "job" of ownership/management of it.



THIS is the focus to meditate on;
HOW can you pick a field, and rapidly acquire operational management experience UNDER SOMEONE ELSE'S WATCH, before you jump the fence & hire yourself to the highest position on your own payroll expenses.

TOUGH questions... but; Ask, and you shall receive!

Luck!
Dave
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