When someone asks me what business they should buy, I usually let them talk for a while before I tell them the question is looking in the wrong direction.
The reason is simple. The same business is not worth the same to everyone. Which means “good” isn’t really a property of a business at all. It’s a property of the fit between the business and the owner.
That’s a subtle distinction. It also changes the whole search.
I know because I spent years searching the other way. And I have the receipts to prove it wasn’t cheap.
A Business That Worked, Except for Me
Several years ago my partner and I bought a massage franchise. By any reasonable measure it was a good business. The model was proven. The brand had reach. The unit economics penciled out. Nothing about the investment was reckless.
The problem was what running it required of me.
Almost all my time went to the operational side of employee management. Refereeing personality conflicts. Protecting culture. Handling escalations. At one point I ended up in the middle of a lawsuit between two employees over a situation I wasn’t even in the room for.
The things I’m actually good at, and enjoy, are the ones a mature franchise has already solved for you. Building. Strategizing. Developing new products and services. My job as an owner was to execute someone else’s design well.
That was a mismatch. And I paid the price of it for years before I could see it clearly.
For a long time I read the lesson as “a rigid franchise isn’t right for me.” That framing turned out to be too shallow.
The Frame I Practiced Without Applying
At Guidant, my team and I have spent years getting specific about our own differentiated value. Guidance, which is about helping our clients see around corners. Effort, which is about taking paperwork off their plates. Trust, which is about delivering accurately, and owning our mistakes when we make them. Getting clear on those three has shaped what we say yes to, what we say no to, and how we compete.
I’d applied that thinking to every business I’d operated. What I’d never done was apply it to the choice of the business itself.
That distinction didn’t land until I met James Kellas.
James Bought a Dump
James spent about twenty years in tech, early at PayPal and later at LinkedIn. Somewhere in the middle of that run he’d figured out what he was good at. Two things in particular. Digital marketing and technology.
So when he decided to buy a business, he didn’t start with a category he was passionate about or an industry that seemed exciting. He started with a specific profile. Boring. Recession-proof. In an industry where those two skills would give him an outsized edge on day one.
He landed on auto repair.
The math on that industry is telling. Most auto repair shops are run by mechanics. Mechanics tend to be excellent at fixing cars, and less strong on business, marketing, or technology. The average shop is well-served on the one thing James couldn’t do himself, and underdeveloped on the two things he could.
James wasn’t looking for a fix-up project. He didn’t know how to work on cars. He needed a business that was already running well operationally, so he could focus on growth.
He started his search by targeting shops with stellar Google reviews.
The one he ended up buying was, in his words, a dump. He told me you could practically scrape the grease off the floor with a spatula. But it had a 4.9 star rating on Google. The service was great. The customers were loyal. Everything on the operational side that’s hard to build was already there.
What was broken was exactly what James was built to fix. The place was dirty, underpriced, and marketed almost not at all.
He paid $150,000 for it. About two times earnings. It now does over $2 million a year.
The Question He Asked That I Didn’t
What James had figured out, and what I missed with the massage franchise, is that he wasn’t looking for a good business in the abstract. He was looking for one that aligned with his particular strengths in a way most other buyers couldn’t match.
That’s the question I would start with today.
Where can I walk into an advantage on day one, based on my skills, experience, network, and everything else I bring? Where does my particular combination give me an edge no one else looking at the same business is going to have?
The framing seems small. It changes what you’re looking at, what you’re willing to pay, and how much you can grow the thing once it’s yours.
The Airline Seat
I’m six foot two. My wife Jill is five three.
The value of an upgraded airline seat is dramatically different for the two of us. For her, the extra legroom is nice. For me, it’s the difference between a fine flight and a miserable one. Same seat, same airline, same price. Different value based on who’s in it.
Businesses are like that.
A business is worth more in the hands of an owner whose strengths are exactly what that business is missing. Same P&L. Same customer base. Same industry outlook. Different owner, different upside.
James could have paid three times what he paid for that auto shop and it still would have been a great deal for him, because of what he was bringing to it on day one.
If I Were Doing It Over
I’m not looking to buy anything right now. My plate is full with the businesses I already have.
But if I were, I wouldn’t start by asking what’s a good business to buy. I’d start by asking where I’m uniquely dangerous. Where my experience, my network, and the things I happen to be good at would let me walk in and do what the current owner can’t to grow the company.
I’d think about the industries I already know something about, the ones where my network gives me something the average buyer doesn’t have. I’d think about what I’m actually good at as an operator, and then look for businesses that need exactly that to grow. And I’d probably ignore a lot of businesses that look attractive on paper but wouldn’t be worth much more in my hands than they are in the current owner’s.
Somewhere out there is a business that’s working just fine, but would be worth substantially more the day you walked in the door.
The trick is getting clear on your owner-differentiated value first. Then going to find the business that needs exactly that.
One Last Thing
The last time you looked at a business and thought, “I could do that better,” what specifically were you seeing? And what were you bringing that the current owner wasn’t?
