Start or Buy a Business
Let’s meet Lynn and Ted who are considering starting their own business. Or will they buy one?
Seeing the choices that Lynn and Ted have made across the course out their lives helps us to see what will work for them if they decide to start their own business. Let’s watch their lives unfold across the years.
Lynn and Ted meet while they are in college. She is majoring in psychology, and he is majoring in engineering. Ted sits in the back of the philosophy class and watches. Lynn sits on the first row. When the professor asks questions she is usually the first one to raise her hand. She is very positive. Curious. Enthusiastic. Generous in how she views human nature. And beautiful. He follows her out and invites her to go to coffee.
Philosophy is not on either of their degree plans – so why do they take it? Lynn meets so many people whose lives had been so different from hers before they came to college.
Lynn watches her mother help people. Her mom and dad and a dozen other families start a church in their new suburb. She teaches Sunday school and gets others to volunteer to teach, too.
Lynn takes philosophy because she is going to use her psychology degree to help people and realizes that she will do a better job if she understands the basic philosophy of life of each person she works with.
Why does Ted take philosophy? He sees that all he will learn in engineering is engineering – he won’t learn how to understand people. So he takes philosophy.
Ted gets a job with an engineering and construction firm, Lynn goes into human resources, and they marry. They have two girls and a boy. Lynn wonders if she should keep working. Ted wonders if he should leave the engineering firm and start his own business.
What each of us values determines how we spend our money. Let’s see what Lynn’s and Ted’s values are. Both are high in Economic Value (rank higher than 97% and 77% of us), so they want to have a significant amount of money to fund their lifestyle. Since both also rank high in Theoretical Value (higher than 75% and 85% of us), they also want to be sure that they have considered all of the possible options and the advantages and disadvantages of each before they make plans.
He researches starting his own business. While he is still working at his firm he goes to the Small Business Administration and researches how to start a business. Here he can take a course in how to write a business plan and how to get funding for a business. SBA also has a mentor who had a company that sold a construction equipment company who could advise him. His firm pays a lot of money to lease equipment to do construction. He wants to know:
1. Can he buy the basic equipment that his firm uses now and lease it to the firm at a better price than they are paying now and make a reasonable profit?
2. Will his firm give him a contract for the large, new project they were just awarded that does not start right away?
3. If his firm likes the arrangement will it give him a reference?
4. Can he take this contract to investors and get reasonable terms on funding to buy the equipment?
Print out the Test Results for Lynn & Ted so tht you can look at the Test Results while you read more about Lynn and Ted.
How can Lynn and Ted use their personality strengths to consider starting their own business? Read 1.–10.
Open the Test Results for Lynn & Ted.
So, what did happen?
Ted got a “yes” on all four. Great! He will analyze it between work projects.
At higher than 98% of us in Autonomy upper management in the in his firm does not really know what to do with him. He is the best young project manager that he has in terms of setting up the work flow chart and carrying it out – on time and on budget. So he does outstanding work – but he offends management above him who have high Political Value and Dominance.
When his manager gives him a project to manage, he goes into his cave. Does not return phone calls unless he needs input for the project from the person who calls. Only calls people when they can give him the data that he needs to do the work flow chart for his project. His results are so good that management above him just throw up their hands and let him do his thing exactly like he wants to do it.
Ted’s strengths in Autonomy and Dominance leads him to decide to leave the engineering and construction firm to work for himself, but he does not tell anyone yet.
Notice how high Lynn is high in Religious Value. Whether she is working outside of the home or not, she is going to need to do something in which she is helping to make a difference.
How she could help Ted run his company? She could manage the money – that way no employee could embezzle any funds. Or should she keep her job that she likes and keep providing health insurance for the family?
Given Lynn’s and Ted’s personality strengths: Should Ted stay at the firm or run his own company? If Ted does have his own business what do you think it would be best for Laura to do about her job? What other advice would you give Lynn and Ted?
Then Ted wondered if he could buy a business to run – instead of starting one.
Ted thinks about buying a construction equipment business. Why? Perhaps he could find one who has a long history of loyal customers. He could require that the selling owner stay on a one or two year contract to show him how to run the business.
While he is still working at his firm he goes to the Small Business Administration and researches how to buy a business. He takes a course in how to write a business plan and another one in how to get funding for a business. Takes a tax course for business owners.
The SBA gives him a list of business brokers who buy and sell businesses. He meets a mentor through the SBA who sold a construction equipment company and can advise him.
His mentor suggests that he use a business evaluator to appraise businesses that interest Ken. They get an evaluation of three construction equipment businesses.
Armed with knowing what to look for, Ted and his mentor dig deeper. Together they look over the company books of businesses that Ted may want to buy. Ask why they are selling. See if what is on the books fits what the owner says about why s/he is selling.
Ask which owners would be willing to do a buyout that includes part of the sales price coming from a percent of profits in the first few years. Ask what relationships they have with private investors and banks who already hold a loan for the business. Mention the contract they have for leasing equipment to his firm. Ask the private investors and banks to watch how they execute their business plan with a view toward financing expansions in the future.
Reasons I Want to Consider Starting or Buying a Business
1. I feel like I have outgrown this job. It bores me now. Who do I know who started a business – or bought one?
2. I have hit a glass ceiling. Could getting a college degree can help me break through it? If not could I start a business and have the organization that I work for be my first client?
3. I have hit a glass ceiling. A second degree can help me break through it. For example, I am a petroleum engineer. An MBA that might position me for upper management. Or could I start a business and have the organization that I work for be my first client?
4. I don’t get to use my people skills enough.
5. I don’t get to use my brain enough.
6. I want to energize people who work for me. That is how I need to make a difference.
7. I want to make more money. I could get an mba with a specialty in marketing. Or perhaps I could take what I have learned at work, start my own business and make this organization my first client.
8. Is there a product or service that I could provide my organization better or cheaper than the company that provides that product or service to my organization does now?
9. I want to be paid more for what I do.
10. There is too much travel in this job.
12. I want to set my own hours and vacation schedule.
13. What other reasons can you think of?
Can my spouse and I use our PSAs© to decide whether or not we should start a business?
Sure. Use your PSA© to make a chart like this and figure it out.
You already learned a lot about how a couple can use a PSA© by reading about Ted and Lynn. You know a lot about your current situation.
1. If you haven’t already done so: Print out Ted’s and Lynn’s PSAs©. You can print out this case study, too. Scan them and save them as a document in a folder named “My PSA© and My Career.”
2. To order your PSA©: Go back to the Home Page. When you take your tests: Think of yourself as you are when you are at your very best.
3. After you get your PSAs©: Use it to help you see how to use your personality strengths to make your career all that it can be.
4. The more you think about your strengths the more you will see how to make them work together…and you get to see how they build together for all of your life.