Coffee talk business conversation

I see you're in your office.
I sit here every weekday after 2pm gathering my thoughts and writing about random business conversations.

I remember reading that in one of your blogs. I was in drive-thru and I saw bright orange jacket screaming at me. Then I saw it was you and it wasn't a surprise.
How's your business purchase coming along?

I haven't done anything further with it.
Why?

I have to figure out the money thing and decide if it's worth it for me.
Are you worried about financial stability?

Of course.
What if you lost your job tomorrow?

I'd be out of work and have to find another job.
You aren't comparing like objects. The stability of your employment is based on the assumption that you will be continuously employed forever. When we both know, downturns in the economy, rightsizes, merges and acquisitions, competitive factors and technology threaten our jobs everyday.

Yeah but I have a steady paycheque, whereas if I bought that company, there is no guaranteed paycheque.
Has the business been around for more than 10 years?

Yes.
Is the business dependant on the current owner being there?

Yes and no. The employees do the "real" work while the owner sits in an office all day, doing nothing except taking a three hour lunch everyday at god knows where.
Don't misinterpret entrepreneurship with technical work.

What's the difference?
Let me change the question.

I should've expected that from you.
When you're at home, do you have chores to do?

Umm, yeah. Don't we all.
Right, but isn't the chores we do like cleaning the garage, mowing the lawn, or painting the fence considered work?

Sure, but it's not paying work.
Exactly, but if it doesn't get done, what happens?

Things start to break, and the value of my home will go down. I'll be miserable.
So as much as you hate it, if it doesn't get done, things will be worse.

Exactly.
The same goes for business. Many would-be entrepreneurs get into a business that does a technical job that they're really good at. They focus on the technical aspects of the business and ignore the other stuff. The focus on where to make their dollar today. And just like you're home, if you ignore the other stuff long enough, it devalues itself, it starts to break down and ultimately it will make you miserable.

You've lost me. You're comparing household chores to office work. I get the need for office work. I'll just hire someone to do it.
Right, so why haven't you hired someone to mow your lawn yet?

Wha??? That's not a fair question.
My point is that your discounting the contribution of the owner in his organization because he sits behind a desk and then disappears. Just because he isn't doing the billable work, doesn't mean his contribution to the organization isn't substantial.

Ok. Fair enough. He's there everyday.
Are the sales growing or are they flat?

Flat, but with new blood, the sales could explode.
Could they implode?

The majority of sales are dependant on federal political contracts.
Are these contracts awarded annually?

Yes. But he gets them every year.
So what's the problem?

I'm afraid the contracts won't give me enough security to move forward with a purchase.
That's fair. Why do you want a business anyways?

To make more money.
Wrong answer. If you want to make more money, keep your job, or get another job, or figure out how you can make money on the side while keeping your job.

But I want to own a business.
No. You just said, you wanted more money. You think owning a business will give that to you. That's a false assumption.

What's the right answer?
There isn't one. An absence of the wrong answer is the right one.

Now your talking in riddles. Please help me out.
Wrong answers include; more money, more time, more fame and more flexibility. You see there's a difference between owning a business and owning a personal revenue stream.

Personal revenue stream...um,  I'm confused.
A business is something that helps many people in the community: suppliers, employees, customers and owners. A personal revenue stream is a type of business with a single purpose - make money for the owner.

Can you give me an example?
That's easy. For years young professionals, like doctors, dentists and orthodontists would buy a book of business from a retiring professional. Dr. Smith's clients would get sold to Dr. Kelly, which is truly just a personal revenue stream transfer. There wasn't any brand equity transferred. The brand "Dr. Smith" was gone, and the new brand, Dr. Kelly was here. So although, the young doctor would buy a business, he actually had nothing because the brand equity left with the retirement of the previous doctor.

But customers will keep going because we're all creatures of habit.
Yes, but the relationship was with the person and not a strategically built brand.

What would have to be done to turn the same model into a business?
The young doctors started clinics using names not associated to the practicing professionals. Dr. Smith's office became "Doc Wellness". Anyone working at Doc Wellness was an employee, including the presiding doctor. Dr. Smith could leave or sell and Doc Wellness lives beyond him. Now that's brand equity. Customers who came didn't necessarily get Dr. Smith each time.  Just like in a restaurant, they couldn't always choose who would be serving them. They were building relationships with a brand and ultimately a business.

You still haven't answered my question, what's the right answer to why I should own a business?
That's a very personal answer that I can answer for you. What I can tell you is a business exists for only one reason, and it's not for you. The business exists to help others get what they want. It has to be greater than the owner's needs. A business helps customers first. And when I mean customers, I mean buyers, employees, suppliers, bankers, government and landlords. If there's anything left, the owner gets to decide where it goes - his pocket or a in a future investment.

It has to be greater than the owner? I thought the business was mine.
You control the asset. But without everyone else, you have nothing. It is their grace that allows you to succeed. Never forget that. But that's a story for another time. You haven't decided to buy yet.

No, I'm scared.
That's perfectly normal. You have to figure out why you want to do this beyond money. And here's why: Imagine in a moment of weakness, when nothing seems to be going well, when you wish you just had a job. The 80 hour week isn't commensurate with your pay. Your wife is worried. You're worried. Mortgage on your house just got missed. At what point do you quit?

I don't know.
You'll quit when the pain is greater than the perceived reward. If your goal is money and there isn't any, you'll lose faith quickly. If your goal is something greater, you'll persevere through the lack of funds. You'll even invest more money to try to keep your dream alive.

That's crazy. Who would do that?
Only people who get into business for money would say that. A dream is all us entrepreneurs have. And building on it is why we do what we do.

I can't afford to make a mistake. How will I provide for my family if I do?
Then stay out of business. Mistakes are going to happen. This isn't grade 12 math where there are only right and wrong answers. There's no way of knowing for sure what is going to happen. World War 3 could start tomorrow and kill all of our efforts.  I don't worry about the things I can't control. I only dream of things for a better tomorrow.

I have to go, but I just wanted to say hi.
Hi to you as well. Good luck with whatever you decide to do. Just remember, do it for something greater than for yourself. And ask yourself this, if money wasn't a concern would you do the deal?

I don't know.
Right. Money's usually not the problem, but always the excuse to not do something.