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Business Owner vs. Employee the Grass is Greener?-Business Broker Perspective

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I am in the business of helping people buy and sell businesses.  So many future business owners currently work for someone else.  Very often the thought process is that one would enjoy their professional career if they “worked for themselves”.  During my professional business career after college I have been an employee of others for about 5 years and have been a business owner with as few as 1 employee to  25 plus employees for approximately 25 years. I feel I do have some perspective from both sides of the coin.

Is It Better To Be An Employee Or A Business Owner?

I think you could talk with business owners and find that there are several that feel being employee has many benefits, and if one talks with employees you can find many that would like to be their own boss.  And of course there are the group of those that are happy or satisfied being either an employee or a business owner.

But so often we are tugged by the concept that the grass is greener on the other side of the fence.  Many prospective business buyers that I work with are ready to do something on their own.  They have had very reasonable business careers working for others but are ready make the move to buy a business or start a business and no longer be an employee.

Why may an existing employee want to buy a business or start a business–

Business Owner

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  • want to do it my way
  • feel I can do it so much better
  • feel being an employee is too limited
  • No longer believe in the company I am working for nor my job
  • Want to make more money ( maybe this should be at the top of the list)

Why would a business owner consider working for someone else as a good thing.  Again part of my role as a professional business broker in Florida is working with business owners looking to sell their businesses.  Part of the process of what I do is the discussion regarding  what one may do after selling their business.  The responses I get are very dependent on ones age and the amount of money one may gain upon the sale of their business.  Age is a very strong determinant.

Looking At The Long-Term Goals

But when we all get excited upon the idea of starting a new business or buying a business, its hard to “fast forward” and visualize a long term business owner that is somewhat exhausted by the demands of owing a business- and working for someone else is a pretty good option. Maybe not as good as selling your business and sitting next to a pile of cash sitting on the beach drinking frozen cocktails. But this option is not always possible.   Selling your business and going to work for others may bring on the following feelings and thoughts-

  • Liberating- The thought of not having to carry  around the strains that go with running and owning a business for many years can be very liberating
  • As a business owner the thought of collecting a paycheck on Friday instead of worrying about making payroll is appealing
  • As a business owner you get to make all the important decision.  Not having to make the important decision may seem like a good thing
  • As a business owner you find that employees get paid 1st you get paid 2nd.  At times that can be very rewarding, other times dealing with the unknown is difficult
  • When an employee crashes a truck your workload/cost may have just skyrocketed.  As an employee this event may result in no more than idle banter in the break room.

All of us business owners and employee out there knows the list can go on and on.  Want to buy a business?  Want to Sell a business?  Want to Start a business?  The grass is not always greener on the other side, but very often we need to jump the fence and see for ourselves.

Sell or Buy Business with goal of Hybrid Retirement

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Owning a business can be a very rewarding experience.  Many will buy an existing business or start a new business with the thought of building the business to the point that it is a successful viable entity that they can sell and live comfortably on the proceeds.  There currently are millions of small business owners in various stages of planning the exit of their business.

I want to sell my business so I can retire comfortably.  There are also millions of aspiring entrepreneurs that are considering buying or starting a business with the goal of building it and growing it to the point they can sell it and retire comfortably. It seems so often when discussing what one does it is described as working or retired.( In today’s economy unemployed, looking for work is another status).

I beleive there is a  status between working and retired, and I refer to it as Hybrid Retirement. I certainly don’t see myself as any retirement expert or financial planner, but I have been thru the process of selling my business that I had for 20 years  and have developed my own views on retirement that possibly one going thru the daily work day does not have the time to consider.

My current profession is as a business broker in Florida. Within my community I am surrounded by retired people, and also after the sale of my business I did take “some time off”.  As a business broker I speak to many business owners considering the sale of their business. One of their top considerations is “If I sold would I have enough to retire?” .

 Why not aspire to Hybrid Retire?

I personally think the majority of those currently working full days either employed or as small business owners look forward to the day they can retire, stop working, and spend the rest of their days fishing, golfing, or hobbies. Of course your age at the time of cashing in can greatly affect your decision process. If you are 75 years old, maybe you say enough is enough and just head to the golf course.  But if you are fortunate to be successful and exit in your 40’s, 50’s or maybe even your 60’s your perspective, and needs could be greatly different.

The thought process for someone thinking of selling a business goes something like this:

I think I need to sell my business, walk away with $500,000 and that will be enough for me to retire.  But what if you had someone that would buy your business and allow you to walk away with $400,000?  Maybe this is a good time to entertain such an offer and consider Hybrid retirement.

Hybrid Retirement

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If you believe you need $50,000 per year to live off of, and the sale of your business may give you $35,000 to live off of, should you walk away or consider.?  Many small business owners get overburdened with the responsibility of owning a business, and really want to sell those responsibilities away to others.   Maybe making the $25,000 monthly payroll or covering the $100,000 per month fixed overhead cost month after month just gets to be too much.

Perhaps you can consider upon the sale of your business,  you can find another business to buy, possibly one that you have aspired to do for years, or possibly work for someone, under terms conditions that fit your lifestyle.  But this second business you don’t need to make that high monthly expense, and now you are supplementing the proceeds you have from your sale, and what you need to draw from the business is a lesser amount.  “Needing” to make $15,000 per year instead of $50,000 can be somewhat liberating!

Why Hybrid Retirement?

  • Do you really know that you can “do nothing” after working for 20, 30, 40 + years
  • You have someone looking to buy your business near the price you think you need.  maybe consider the offer and plan to supplement the difference with a second career, part time job etc.
  • This is an opportunity to build a profession around your lifestyle, whereas before you may have had to try to build a lifestyle around your business.
  • Are you really prepared to try to live off a “fixed income”- supplement that with something you aspire to do.

I think currently due to economic condition there are many small business owners delaying the exit / sale of their business because the recent performance of their company may not allow them to achieve the “walk away” money they believe they need to retire comfortably on.  There also are eager entrepreneurs ready to start a new venture with hopes of one day selling and retiring off the proceeds.  Maybe planning for both of the above scenarios can best be addressed by allowing yourself to consider Hybrid retirement.

Running Your Business when Disaster Strikes

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Running a small business is full of daily challenges.  The problems small business incur are both large and small.  Businesses are not run within a vacuum.  Sometime as business owner we create our own problems.  Other times problems immerse themselves upon the business at no apparent doing of the business.

Dealing With Problems

A business owner needs to be able to deal with problem no matter the source of these problems if they wish to sustain. Disasters such as Hurricanes, Tornadoes, Cyclones, Tsunami. Mudslides, Monsoons, Terrorism, Floods, Fires occur.  They always seem to affect someone else.  “I really dont need to plan for a disaster because it always happens to someone else”.

I was that small business owner that was that someone else.

My business was struck by an arsonist…twice …  that caused almost $1,000,000 in damages… while I was bedside in the emergency room of my 10 year old son that was injured in a bike accident… while my wife was 7 months pregnant.

There are percentages and statistics available that speak to how many businesses never survive a major fire and those numbers go from 50%-80%.   We had 2 major fires withing 3 months of each other. I have not seen any numbers on those that survive 2 major fires.

I, with the help of so many managed the company thru those difficult times, ran the company for another 10 years, sold the business, the business continues to operate and I further my profession as a Business Broker.

The Impact Of A Disaster To Your Business

I would like to point out a few of my observations as I went thru this very difficult time that ultimately ended with the trial and conviction of a repeat arsonist… that ended up being a key employee.

1. You do not work thru a major disaster by yourself.  I was assisted by my wife, my family, my employees, my friends, my community, my competitors.  (One competitor allowed us to operate out of their facility during the middle of the night when their plant was normally un-occupied).- Others want to help, let them help.

2.  You think you currently multi-task as a business owner, and then you find out what you are really capable of.  Normally you are dealing with your customers, employees, vendors, facility, agencies, financial all at the same time.  Now add in restoration contractors, Media, insurance agencies, fire Marshall’s, investigators,lawyers,police chief.  Everything very fast,gets very busy, and you thought you had been busy before.  Somehow our situation became a rather big story in the media.  While dealing with the immediacy of the fire, calls were coming in from local TV, radio, Associated Press and Newspapers, and to find  5 minutes to speak with them became impossible.

I originally considered the media request s very low priority, but after getting home that nite at 10pm I had about 50 messages on my home phone of friends/acquaintances that had seen the fire on TV.  These people were part of our customer base, and had me worried that our customers assumed we were out of business. I felt it was important to get the word out that the company is not done.

Business Media Coverage

I got on the phone and did a couple phone interviews with Associated Press, and scheduled time for the local TV crews to come out with cameras and interview.  The focus of the TV news piece was on our intent to continue our business and continue serving our customers. After watching that report on the 6pm news, I think that report was instrumental in allowing our customers to see our intentions. I think its normal to seem overwhelming.

3. Look pass the disaster. Visualize your business not as it is during the disaster, but where it will be in one year.  This can be easier said than done.  may well wishers would tell me things like “that that doesn’t kill you will make you stronger”  at the moment of hearing that, during a crisis, sounds somewhat hollow, but years removed from the crisis you can see some merit.

4.  When you have a business and a disaster strikes, the line between business and personal becomes very blurred.  We are all people first and businessmen second.  Families are affected by disasters, people are affected by disasters, lives are affected by disasters- businesses get caught in the fallout of a disaster, but the importance of the business in a disaster is really a very distant second.

I am a Business Broker in Florida USA.  My 8 year old son (then) is now in college, and while he once layed in the hospital for 8 weeks with tubes, and needles stuck throughout his body , he now is bigger, faster, stronger than I (andbeing a teenager, I know he will never read some of Dads boring blog stating such), My daughter that was born 2 weeks after the 2nd major fire is  a healthy beautiful teenager.

I help people buy and sell businesses.  Buying and selling a business is SO much more than financials and industries.  It can be a life changing event.  The emotional and the personal side of buying a business is very very real.  I enjoy the financial analysis side of a business acquisition,  but I know, I really know its the other stuff that is so much more important.  I feel I understand the mechanics to a life changing event.

Business Ethics – Overrated or Underrated?

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Ethical behavior, quality character, honesty, moral integrity – how does one in business view these human attributes?  I tend to view them as a given with the people I interact in both the business world and in my personal life as well.  I expect the best from people yet keep my eyes open for behavior that contradicts my expectations.

I am a business broker based in Florida.  In the profession of helping those buy and sell businesses.  In my profession, as with most all professions you have what some consider good business brokers, bad business brokers, and OK business brokers.  Most all industries have the good, the bad, and the average.  Is it ethical practices which help define the good, bad or OK?

Business Ethics Among Your Clients

I recently experienced a business activity that made me take special note of a business clients actions. Basically, we had a verbal understanding and agreement regarding a business relationship we would enter into contractually.  While driving to meet with client to sign the documents that outlined our agreement my client was approached by others.

The client and I had no written agreement between us. The  client could potentially go in another direction which could cost me a fair amount of money. I had left at 5:00 am to drive 6 hours to meet client and about 1/2 hour before I got to our meeting he called me to tell me of this other situation.

After listening to what he had on his mind, I was somewhat pleased when he  then asked me how long before I could get there and we could sign our papers and I could represent him with this prospective buyer of his business.  He told me he felt he needed the assistance of my representation, yet he could of handled the situation so much differently.  Before this exchange I viewed this potential client as a good, honest, straight forward individual. His actions reinforced to me the value of dealing with a person of good character.

I have shared this story with several of my friends that are business owners and their response was fairly common.  They too also greatly value dealing with a person of good character.   But that fact that those around me hold business relationships with those of good character in such high regard, makes me realize good character from others is a valuable yet somewhat  limited commodity.

Business Ethics

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A few weeks back my teenage son and I were talking of the Tiger Woods situation regarding his many documented affairs. We both are active golfers and had admired Tiger Woods golf skills over the last 10+ years.

Golf is an interesting game and it has been said that one can learn more about a person in one round of golf than you can in multiple office based meetings. I asked my son that if Tiger Woods had “cheated” on his wife and family, do you think he may have cheated on golf.  My son said, “No,”  I said, “Why?”  He said that he thinks Tiger Woods views golf so importantly that he wouldn’t cheat on golf. So I asked him the obvious, “So you think he views cheating on golf to be worst than cheating on your wife and family and that is where he draws the line?” My teenage son said, “Yes.”

Ethics Of Financial Gain?

I have been associated with several different organizations, associations, and trade groups.  I still get a little surprised  that many of these such groups feel compelled to teach ethics.  I am in the profession of being a business broker and I work with individuals and businesses in the process of buying and selling businesses.  I consider the fact that I will treat my clients and customers in an honest, ethical, and moral manner as a given, yet when I witness others that “consistently take the high road” I take special notice. I have been a member of the business community for several decades and recognize that most all of us are on a quest to increase financial gain.  Where does ethical behaviour fit in that mix?

  • Do you feel business ethics can be taught and learned by all in the business world?
  • Is business ethics much different than normal ethics one utilizes in the everyday game of life?
  • Can ethics be taught to a 20, 30, 40, 50, 60 year old? Or is it ingrained in you before you enter the workforce?
  • Is it ok to treat someone unethically and then pass it off as “Its just business” ?  To this I say No and have always felt that.  I have never really understood “Its just business.”
  • I have never understood “I had to cheat you out of $X,  but it was just business”, ” I know I treated you wrong, but it was just business” – what does that really mean?
  • Does proper ethical behavior really require actual thought or is it more of an involuntary response that just occurs like breathing and blinking?

Is dealing with a person and expecting honest ethical behavior a given and glossed over to allow “more important business issues to be discussed”,  or is it the important issue that all else revolves around?

Start or Buy a Green Business- Measure Twice Cut Once

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I believe  a disconnect exist between all the news media exposure regarding the “green movement”, “green jobs”  and the actual mindset of most small business owners and entrepreneurs.   It is no doubt that “green” has become one of the more reported on phenomenon over the last couple of years.  The  US election had strong ties to green promises  and  future jobs.  This mantra has created general optimism.  One of the most important part of starting a new business, or buying a business is the due diligence needed to evaluate the opportunity.  Do you want to start a business or buy a business in the “green Industry”?- perform some due diligence beyond reading the headlines.

Please consider that small business owners and entrepreneurs are wired to think in the now, and fast, and today and ASAP.  Much in the Green Industry is very policy driven, and that policy comes from federal and state levels, and that policy is wired to work within targets such as long term, next year , and eventually…  To me this creates a disconnect between the small business owner/entrepreneur and the potential opportunities.

Buying A Green Business – My Perspective

My interest in green is from somewhat a different perspective than many.  My real interest in Green began back in the early 1980’s and gas prices were once again going up.  The college I was attending had offered a major in Energy Management and I viewed this to be an industry with unlimited future, and I pursued and achieved my major in Energy Management.  We did experiments on Solar panels, reports on Global Warming, discussed world energy policy, nuclear and many other topics I did find interesting and still do.

Upon graduating with my Energy Management major, I got employed in the energy field and acquired further education and training.  My Entrepreneurial spirit got the best of me and the thought of starting and owning a business and being in direct control of my future had me in a start-up in a non-energy related business.  Sold that 20 years later and here we are in the year 2010 and wonder how far this exciting field has gone in the last 25 years.  It has gotten significant traction in the last years but where is it Jan. 2010?  And my interest in the green movement is its inter-relation with energy efficiency.

I enjoy the financial side of the green movement.  Tangible monies saved as a result of energy technologies and practices utilized.  I recognize the byproducts of many of these energy saving measures to be environmental benefits.  If you can save a kilowatt hour (kwhr), and that kwhr doesn’t need to be produced by a coal burning power plant, you have dual benefits.

I currently am representing  a Current business for Sale that utilizes a Green concept can be found here  at https://www.sellabusinessflorida.com

Buy A Green Business In Florida

1000+ other businesses for sale can be found here as well including many Florida businesses for sale.

1. I am located in Florida, a state strongly hit by the depressed housing market and construction market and unemployment.  I interact with owners in the solar and energy industry and people interested in solar and renewable energy. With current policy (or lack of) in Florida, the solar industry and existing business engage in the solar industry is far from healthy in my opinion (Solar is just one aspect of the various renewable energies and green products and services that comprise the market as a whole.)

It appears to be a yo-yo type industry .  Policy injects some money into the industry, most policy is short term, policy money is exhausted and the industry slows down.  This process get repeated it seems year after year.  I also know of very qualified/licensed individual that work in the solar industry part-time, because the thought is the market is not there to support a full-time business.  I also attend Solar/energy advocacy meetings that attempt to show support of the industry that is full of individuals interested in entering this field, but where are the job opportunities?

Many jobs fall into the contractor categories, but the current market doesn’t seem able to support existing contractors.  Various consulting jobs may surface, but expertise  (that not everyone may have) is needed  and shrinking budgets from potential clients slow these opportunities down as well.

2.  Ok- so it was said that with stimulus money behind the “green movement” we would be creating lots of jobs- where are the jobs.  Numbers and statistics can be “massaged” to represent various results but certainly the empirical info in Florida is not impressive.

Buying A Green Business

Photo (c) mtnweekly.com

The economic stimulus bill’s investments in clean energy have not created many green jobs yet, according to the Council of State Governments.

Only 13,000 green jobs had been created or saved by the stimulus bill through Oct. 10, 2009 according to the council’s analysis of data collected by states. Ohio led the nation with 2,500 green jobs. Rhode Island, by contrast, reported no green jobs as a result of the stimulus bill.

The top programs for green jobs were the Department of Energy’s weatherization assistance program and energy efficiency block grants, and the Environmental Protection Agency’s clean water and drinking water state revolving funds – As reported in the Washington Business journal

3.  The Entrepreneur or business owner interest in the Green movement may be:

– “how much “green” can I make from this business opportunity ?”

-“I feel good about being in this industry that can have positive impact on the environment”

– “Am I missing out on some significant opportunities? ”

– “Can I buy an existing green business with a history of revenues and or profit?”

Conducting a search of “green or energy businesses” that are for sale that have a history of revenues and profits show very limited opportunities.  Possibly the largest opportunities are for entrepreneurs to start new ventures and build them and potentially sell those successful businesses down the road.  I am a fan of the energy saving part of the green movement and believe energy independence to be very sound policy for our country.  I support involvement and interest in this field.

But conduct proper due diligence before you proceed with your green business.  The newspapers, and news broadcast say green is great, governments are sending lots of stimulus money towards the green movement, but proper research and how you approach the “green industry”  in your part of your world will dictate your sustained success in this  potentially large industry.