Small Business Acquisition Consultant – Finding a small business to buy and run instead of taking a more traditional post-MBA job like consulting is an idea we’ve seen at top business schools. At Harvard Business School, for example, the number of MBAs who decide to pursue entrepreneurship after graduation has grown from a few decades ago to more than a dozen and occasionally doubles in a year. The latest Stanford study of search funds reports a record number of active search funds. However, we often wonder why so many students do not follow the entrepreneurial path.
One of the most common concerns we hear when advising our students at HBS is that finding a business to buy — a full-time endeavor — is “risky.” Everyone should certainly weigh this choice based on their own personal circumstances and subjective preferences, but we think these concerns about “risk” are misplaced, and the search for a business is less risky. than other career paths traditionally considered more stable.
Small Business Acquisition Consultant
We put quotation marks around “risk” because we don’t think our students are focused on economic measures of risk—such as lifetime earnings volatility—when they tell us that business exploration feels “riskier” than taking on more traditional job sourcing compared to other traditional careers. We do not think there is much data to determine financial risk because there is not much historical data available on financial rewards for any career. And, interestingly, while our students talk to us a lot about “danger,” they don’t talk to us about the difference in money; In fact, when they look at small companies’ acquisition business plans and compare them to the payments typically offered in traditional career plans, they tell us the numbers are close enough to make a decision on that basis. So money is not their concern.
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We talk to them carefully to understand the root of their pain. We think they are concerned about the chance of not finding a small business during the search, along with the uncertainty of the search process, rather than the financial risk.
And there’s certainly plenty of reason to be concerned when starting a search. Compare starting a more traditional consulting job to just starting a search. In a consulting job, initially there is a fit between training and tasks; When the search is underway, the tasks are often vague, and MBAs are not taught how to identify job opportunities. In a consulting job, there is clarity about both the role and the path to success; In search, it’s hard to see what’s good and most searchers do a little bit of everything, work hard and hope for the best. Additionally, a consulting job matches external expectations: no one needs to explain anything when choosing a consulting career. This is an old road. Search is like bushwhacking in a forest of opportunity.
There’s no doubt that our students are right: there are more reasons to feel nervous at the beginning of a search than to start a consulting career.
But we think that’s a short-sighted view. The search will take a year or two. Let’s assume for now that the search is successful (we’ll deal with another case later). That means a seeker can become a CEO of a business. Over time the business changes to suit the CEO, the management team is chosen by the CEO, products and customer base shift to match the CEO’s skills and interests, and an MBA-trained CEO is likely to understand the business better than competitors. Additionally, the CEO’s significant ownership interest increases rewards and stability. The life of a small business CEO is certainly not anxiety-free, but it is certainly less than the level of irritation to find.
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In contrast, we hypothesize that stress levels increase during more traditional advisory roles. Partnerships are rare; In anecdotal conversations we hear that one in ten MBA hires make it to the senior level of most major consulting firms. After all, it is the benefit of the pyramid structure that creates the wealth of consulting firms and requires huge turnover at the bottom. Additionally, the larger the consultant, the more functions are required
From MBA training; Senior consultants are supposed to be the rainmakers who find new, profitable clients for their firms, and have been doing so for decades in the face of intense competition from other firms.
After all, we think being a senior consultant is more stressful than being a small business CEO.
We don’t know how this will happen, but the picture below sketches the general idea. angstishhigher at the start of the search but later quit as the searcher settled into the role of CEO/owner. Conversely, it is low at the beginning of a consulting career but increases later. Importantly, the bulk of the career falls on the right side of the graph, when this type of stress and uncertainty is low for a small business CEO but high for a consultant.
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Finally, the image is, of course, based on the assumption that the search is successful. We know this isn’t always the case, with the latest Stanford finding estimating that around 26% end up with nothing. What happens to those failed seekers? We keep track of our alumni who have decided to pursue special attention that smaller companies cannot afford. Many abandon their search because they find other attractive opportunities such as startups, private equity, or business leadership positions. In general, we believe that inventors who fail to find a company to buy get hired after their unsuccessful search, and that this experience makes them more successful managers later in their careers. Most of our students seem to change jobs within the first few years after getting their MBA, so finding a job after an unsuccessful search is no different than choosing a traditional career path. Career first.
So, here’s the tradeoff, as we see it: Finding a small business to acquire gives you the opportunity for professional freedom, which few get in a traditional job. Sure, there’s stress and uncertainty in the beginning as you watch and then learn to run your business, and those years can be more difficult than if you were pursuing a traditional career. But over time, that annoyance fades, and owning your own small business can be better than a traditional career — at least on the angst dimension — for most of your professional life.
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Kisan Patel is the founder and CEO of a Chicago-based effort management software company that uses agile principles to transform and modernize the financial industry. As a former M&A consultant with more than a decade of experience, Kisson evolved after witnessing many deep, industry-wide structural problems and inefficiencies.
Anyone interested in following a mergers and acquisitions career path should know from the start: it’s not for the faint of heart.
While it may look like all wheels and deals from afar, finding the potential of a deal and earning millions in commissions from closing it, the reality is actually not very attractive.
Companies are not that easy to sell and can spend years waiting for the right buyer to come along.
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During this time, investment bankers with sell mandates will update sales documents several times, performing repetitive tasks such as refreshing company information, financials and market outlook.
The team may not have heard of the company at the start of the project but it is not an exaggeration to suggest that they are more familiar with its work than 95% of the employees were when the company was sold.
The repetitive nature of the work is coupled with the fact that potential buyers can ask virtually anything about the company.
We, here, work exclusively in the M&A industry and have collected as much useful information as possible to give you a complete understanding of how to start a career in M&A and answer the questions you may have.
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A good M&A career path puts you at the nexus of finance and strategy more than any other position. From the very beginning of your M&A career you will gain a level of seniority – and by extension, industry expertise – that other roles may take years to achieve.
It can also be very beneficial if implemented well.