BEYOND THE PURSE:
BUY A BUSINESS THAT FITS
I was cleaning out some storage from my childhood when I found The Purse in the back of the closet. When I was a tween, several of the popular girls in school had these awesome—awesomely expensive—purses. I remember arguing, begging, and cajoling my parents to get me one, as if my very existence depended on it—in the persistent way only teenagers can. My parents weren’t exactly Scrooges, but not even my mother owned a designer handbag. My allowance covered the usual teenage luxuries—music, comics, candy, and the occasional cheeseburger—so getting that handbag felt as out of reach as touching the moon. My parents, firm as ever, said no.
But then, on a significant birthday, they surprised me: I got the coveted handbag. You probably know how this story ends. By the time I’d finally unwrapped my new prize, the popular girls had already moved on to the next must-have item. Suddenly, my brand-new purse was no longer my ticket to the exclusive club I’d imagined—and, if I’m honest, it never really suited my style anyway.
Looking back, the truth is clear: What I really wanted wasn’t the handbag. I wanted to feel like I was making “the right” fashion choices, keeping up with the cool kids. I wanted to be accepted. The purse was just a shortcut.
I’m really a sturdy backpack kind of gal. For instance, I still have the backpack I bought for my honeymoon almost 25 years ago. Well-used and loved, it’s now been repurposed for taking the dogs on their daily walks. As soon as I grab that backpack off the hook, they’re ready for an adventure.
You might assume experienced professionals would not approach buying a business the same way tweens shop for trendy accessories. But, whether they realize it or not, that’s often exactly what they’re doing.
I see a lot of prospective business buyers on the verge of making the same mistake. I was speaking with an aspiring searcher and she kept asking me for the popular businesses to buy like her life depended on it. I worry she will look at her wallet (her savings, plus lender and investor potential) and at what’s hot right now—the trendy industries—and convince herself she needs to jump on the bandwagon. Truth be told, I may be a little guilty in fostering this by reporting in the past on these types of trends as industry “news.” But business trends are lagging indicators. What’s in vogue today likely caught fire two or more years ago. By the time you start your search—and especially by the time you actually acquire a business, which can take a year or two—the buzz may have already moved on.
Does that mean you shouldn’t buy in a trendy industry? Not at all. If you happen to have an IT services background and IT services are hot—and you think you can get a good deal at a good multiple—then consider yourself fortunate and search on. But, notice the caveats I put in place — your professional experience, a good deal and a good price.
Lessons for Buyers
Instead of chasing trends, take the time to:
- Understand Your Motivations: Why do you want to be an entrepreneur by acquisition? What about owning and growing a small to mid-sized business truly appeals to you?
- Do Your Homework: Dive deep into why certain industries are popular now, and whether they align with your skills and goals—not just your fear of missing out. Pro tip: Ask lenders you might work with how their portfolio companies in that industry are actually performing. Sometimes their perspective is more revealing than the hype.
- Think Long-Term: What will the landscape look like when you’re actually at the helm? Is the business still compelling even when the excitement fades?
- Stay True to Yourself: The best business is the one that fits you—not just some fleeting trend.
At the EtA Launch Hub, we explore the question of “What’s My Motivation” with the gusto of a Daniel Day Lewis or Cate Blanchett in a role of a lifetime. Because, well, it sets the stage for your role of a lifetime: CEO. So many important decisions in the process flow from your answer to that question. We do specific exercises to divine the answers and have access to mentors and certified coaches who can assist.
You don’t want to buy The Purse of a business, only to discover you’d have been much happier with a “backpack.” The lesson: don’t buy a business just to allay concerns about making the “right” choice. Choose the one that’s right for you—and you’ll still love it long after the trend has passed, ready for daily adventures of your own.
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