MERGERS&ACQUISITIONS
with Jey Arul
The road less travelled
by women entrepreneurs
A
transition into small business
is a natural progression for countless women who have invested the first phase of their careers in the corporate world. Paradoxically, many women are not focused on these opportunities or, if they are, they are unaware of the entire spectrum of possibilities, which includes not only starting a business from scratch, but buying a business as well as partnering with other existing small business owners. Women do not arrive easily at the conviction that they can “find and afford to” acquire an existing business that also fulfills their personal passions and interests. In fact, at VR we have noticed that less than 10 percent of independent businesses and less than 25 percent of franchises we sell are acquired by women. Those who seek to buy a business rather than start a business are indeed a rare breed, but that’s mainly due to lack of exposure rather than lack of suitability. Although the general public has heard the message that women are starting businesses at twice the rate of men, not only is the topic of “entrepreneurship by acquisition” rarely featured in the mainstream press, it’s not a common topic in women’s publications either. I was surprised how little information is available on the many women’s associations and entrepreneurship organizations sites on the topic of buying and selling businesses. Ironically, my experience shows that women can relate better to the small
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business pitch than most men, and they are especially hungry for entrepreneurial career solutions. They want to be their own bosses, set their own schedules and priorities, earn incomes directly related to their business talents and contributions, and feel proud about the products and services they are offering. They should and, hopefully will in the future, make up about half of all business buyers. Whether you are a woman in business for yourself or someone who has the chance to advise women in their entrepreneurial endeavours, here are some key insights that will open your eyes to all the options in the world of small business:
You can express your passion through a business you did not start.
Before you decide to risk everything to pursue your original business idea, explore whether you can improve upon someone else’s existing concept or similar business. For many women, passion is the vital ingredient in a business, but you should be open to different ways of igniting and channeling that passion. Businesses that have customers and cash flow provide an entrepreneur an amazing head start—something to get passionate about in its own right!
Seeking adequate financing early allows you to grow to your optimal size. Many women-owned businesses start small, and often stay small. Million-dollar revenue businesses owned by men outnumber those owned by women by about 8 to 1. Don’t let this be you. Seek bank financing and/
or seller financing as a way of ensuring that the business you buy will be sustainable. And, as you do so, don’t be too afraid of giving a personal guarantee—it’s simply an established part of doing business.
Women, with their excellent relationship skills, are well suited to taking over existing businesses and working through transitions with retiring business owners.
Anyone who has bought an existing business or taken over a family company knows how valuable the expertise of the departing owner can be in a transition. Women’s less aggressive, team-oriented management styles can often work well in these situations. If you’re saying to yourself, “Yeah, all this sounds really great, but will I be able to do it?” then you’ve just got to keep educating yourself. The Internet is a good place to do this. It’s a reasonably economic way to do the research, and it’s a good place to start networking! Take some time to search the web (make sure you check http://www. smartwomen-smallbusiness.com/) to find more information that can help you find a business that you can buy and grow. √ Jey Arul is president of VR Business Sales in Edmonton, AB. He started the mergers and acquisitions company in 2007 after leaving his position as a senior commercial banker for a Canadian Bank. Jey holds a BA in Psychology and an Executive MBA. Visit www.vralta.com EDMONTONIANS SPRING 2012