How Important Is Experience Before Buying a Business?
One of the most common questions I get is:
“Do I need experience in a sector before I buy a business in that industry?”
Many people believe that you must have direct experience in a sector before you can buy a business in it. For example, they think you need to be a plumber in order to buy a plumbing business.
This belief sounds logical, but in reality, it’s one of the biggest misconceptions in business acquisitions.
Being Good at the Skill vs Running the Business
Being a plumber and knowing how to run a plumbing business are two completely different skills.
You can be one of the best plumbers in your area and still have no idea how to:
- Manage cash flow
- Build systems and processes
- Lead a team
- Scale operations
- Prepare a business for growth or exit
The same applies to almost any industry.
If you want to buy a plumbing business, you don’t need to be a plumber.
What you need is the ability – or the willingness to learn – how to run a business.
Business Is a Skill in Itself
Running a successful business is a skill set of its own.
It requires understanding structure, systems, leadership, and strategy.
To grow a business from point A to point B, you need a clear framework that shows you:
- What to focus on
- In what order to execute
- How to remove yourself from day-to-day operations
Industry knowledge is useful, but it’s not the most important factor.
Where Industry Knowledge Comes From
If industry knowledge is needed, you don’t have to be the one who has it.
You can:
- Hire a general manager
- Bring in a CEO
- Retain key staff already working in the business
These people understand the technical side of the industry.
Your role as the owner is to build the structure, guide the strategy, and make decisions that move the business forward.
Think Bigger When Looking at Opportunities
If you limit yourself to only buying businesses in sectors you already know, you significantly reduce your opportunities.
Next time you think about buying a business and assume it must be in your area of expertise, think again.
By widening your criteria, you open yourself up to far more opportunities – many of which may already have:
- Proven products or services
- Existing customers
- Cash flow
- A team in place
Real Examples
I have people in my community who have bought businesses in industries they had never worked in before. Despite having no previous experience in those sectors, they managed to grow those businesses in a very short period of time.
The reason?
They focused on learning how to run a business, not how to perform the technical work.
You can see some of these examples in the Success Stories section and learn how they did it – and how you can do the same.
