The last couple of weeks I have been doing some soul searching.
If you’ve read my introductory article, you will recall that my professional development has been less than stellar. And most definitely not straight forward.
“Retired” at 38 from a “safe and secure” job, I went the entrepreneurial route. That is to say I started my own investment advisory business.
After a few years of struggling alone, I joined up with two partners who were supposed to make up for my own shortfalls. Mainly selling and administration.
Well, the admin guy was good. The “sales guy” did even less sales than I did.
And so it continued for the next decade and a half through a few other ventures of mine.
Hence my soul searching. Over the last year we moved continents (from Asia to Europe) and I need to get my act together.
Age does not stop for anyone!
Looking at the numbers, about 90% of all start-ups fail. In the first year. Maybe I have learnt something after all. It took a few years each time….
The great realisation is that I am a statistic. And being a numbers guy, now that I have realised this, I should really be able to turn this to my advantage.
Do I want to be an entrepreneur, someone who starts new companies and drives them to success?
Or should I learn from my failures, change horses, take a short-cut and become a business owner?
As a quick aside, in the crypto space we usually talk about entrepreneurial start-ups rather than established businesses. And we tend to forget that the large part of the economy actually lies in established businesses rather than crypto-related start-ups.
The shiny object syndrome at work?
If I become a business owner, not an owner operator or a professional manager with a share of the ownership but an investor with strategic overview, and make the business of business my business, then my chances of success should improve.
Businesses with a 10-year or more track record are more likely to keep going than start-ups.
How to find a suitable business though?
Using US statistics as a guideline, there are 50 million Baby Boomers looking to retire in the next 10 years.
Of these, 12 million own businesses. Many of these businesses will be passed on to family members.
However, many will not.
The best guess is that around 4.5 million businesses in the US are looking to change hands over the next decade because of retirement and related reasons.
That means there is a huge opportunity for interested parties to buy these existing businesses.
The interesting thing to know though is, about 80% of all businesses offered for sale do not find willing buyers and have to simply close down. This is likely to be an even worse financial option than selling the “going concern” to a third party.
This should result in quite a few “motivated sellers”.
My decision in the end was an easy one.
In my corporate life, I considered myself an ok manager. My staff always considered my “too stand-offish” as a manager though. Not good for performance evaluation time!
Not surprising though given that I am an introvert.
My investment decisions are no worse than most professional investment managers out there.
Although as a more value-focused investor I would have likely underperformed during the bull market. And would be significantly outperforming in the current environment.
And I am not afraid to make unpopular calls. Being a contrarian. That is my main distinguishing feature compared to “the market” where the main focus always appears to be “index-hugging”.
As the saying goes, in finance it is better to fail conventionally, than succeed unconventionally.
My mind is thus made up. I will become a business owner whose business is to own other businesses.
I am currently making sure my acquisition criteria suit my abilities and know-how. No point buying a business where I cannot add value!
