Adam Jacobs on Buying Failing Businesses and Turning Them Around
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Is there anything more thrilling than being or business owner? The feeling of contributing something unique and valuable to the world, doing something you love, and, ideally, making money while you’re doing it?
I’ll never forget the feeling of when I started working with . I’d been passionate about helping people since seeing how it lit up my sister’s life when we were growing up. After she passed away, working with Bubblegum Casting was a way to remain connected to her. It turns out the helping people dream’s come true was my dream come true.
But what do you do when you’re not sure what kind of business you want to build? Or if you don’t have the time to dedicate to starting something from the ground up but still want to experience being in business for yourself?
Buying failing businesses is a great way to get started as a business owner or an entrepreneur. You get to help someone else out at the same time, as an added benefit.
How To Succeed When Buying Failing Businesses
Entrepreneurship, running a business, flipping… these are all different approaches and goals for buying failing businesses. These have been in the headlines non-stop for at least the last 10 years, as we all seek out side hustles and grinds, passive income and, ultimately, our dream careers.
The thing of it is, is that alternative business models is still business. Like with , where we connect models, , and creatives with powerful and influential brands. Running a talent agency is fun. It’s creative. It’s challenging. It’s rewarding, as you meet fascinating, talented people from all over the world.
It’s also an intense amount of work. It’s a good thing that I love it more than anything, as there’s no way I’d have stuck with it to see it become the success it has, otherwise.
1. Start With Market Research
No matter what kind of business you’re getting into, you’ll want to do some research before you get involved in earnest. You wouldn’t want to sink a bunch of money to buy a business to discover that there are already a dozen of them in town.
Doing your due diligence will also help you get an understanding of the industry you’re hoping to get involved with. This should help give you a ballpark estimate of how much businesses run for, roughly. This way you’ll recognize a good deal when you see it.
Researching your business will also help give you a rough idea of how much it will cost to operate your business. While you don’t necessarily need to save up two years worth of operating expenses like the conventional business wisdom, you’ll still want to make sure that you can keep the lights on while you’re waiting for income to start coming in.
2. Make A Business Plan
As you’re researching your business and calculating expenses, you should start to get an idea of what running your business might look like. You’ll get an idea of what kind of funding you’ll need to come up with. You’ll have a rough idea of what your expenses are going to be.
You should take all of this knowledge and put together some sort of business plan, however rough. For one, simply laying it out on paper will help clarify your thoughts. It will take things from being formless and vague to clear-cut and concrete. This way, when you do have your business you’ll be ready to hit the ground running.
3. Decide On Personnel
Are you going to have employees? Will you be running the business yourself? If you’re going the soloproneur route, you’ll need to make sure that you really have the time, energy, and resources to make your business a success. Running a business takes a tremendous amount of work.
That’s another advantage of buying a failing business. There may be people who work there already. While this does put you in the position of deciding if you want to keep the staff that’s already there or if you’re willing to give them the boot, it also means you have the potential to learn from their collective wisdom. You could, theoretically, save their jobs and save the day, as a nice side perk.
4. Meet With Customers
One of the advantages of buying a failing business is that it often comes with a built-in customer base. Maybe not a huge one, otherwise it wouldn’t be a failing business. But there are bound to be some loyal, steady customers. And that is a rare and precious commodity in today’s world.
If you’re operating a physical space in any regard, you should try and meet the existing customers while the original owners are still in business. They might be able to introduce you to their regulars, making an introduction as smooth, easy, and pleasant as possible.
You should try and ease your customers’ minds that they’re still going to get the same great service they’re used to. You might even consider giving them a special deal or incentive to thank you for their loyalty.
It is infinitely easier to keep a customer than it is to find a new one. Remember that when you’re going to buy a business for sale, and you’ll be grateful for every little thing that comes your way.
Want To Learn More About Building A Business?
Buying failing businesses is just one way you can get into business for yourself. There have never been so many useful, accessible, powerful tools and resources available for small- and independently-owned businesses and entrepreneurs.
Adam Jacobs is the incredibly busy Managing Director of Bubblegum Casting, and Hunter Talent He works with some of Australia’s biggest brands, media properties and agencies to secure talented children to work in Television, Film and Modelling roles. They’ve recently launched an office in LA too.