Buying a business is one of the biggest deals you might ever be involved with, and that leads most people to stick with what they know. But that doesn’t mean you can’t find success in a field outside of your experience.
For most people, buying a business is one of the most calculated decisions they’ll ever make. The usual route involves purchasing a company that benefits from your existing contacts as well as relevant industry experience and expertise. For some though, purchasing a business takes on a much less conventional route.
People understand that starting a business from scratch is a major undertaking, regardless of how much experience you have in a certain industry. There’s the question of funding, finding customers, developing a business identity, cementing a reputation and waiting for the financial rewards to start trickling in.
On the flip side, buying an existing business usually means the package includes an established customer base, easier financing options, tried and tested systems and processes and trained employees.
With that in mind, how big of a concern should it be if you want to buy a business but have no experience in that specific industry? Let’s look at some examples.
One of the world’s most well-known businessmen would have to be Richard Branson.
In an article on the virgin.com website, Branson expressed the opinion that having experience of the industry in which you’re setting up a business should not be a prerequisite.
When discussing his leap from owning a small record shop to starting his own record label, he notes, “We were very sensible when we started out, setting up [in connected industries].
“We went from running a small record shop to starting up a record label with recording studios and then added our large music megastores to our portfolio,” said Branson.
In contrast, when Branson created Virgin Atlantic, he admits he had no industry experience at all, yet used one very specific concept to ensure his success, the customer experience.
“I knew nothing about air travel, but as I’d flown back and forth from Britain to the United States on business for Virgin Records, I’d become convinced that there had to be a better way.
“The prices were high and the service was dreadful.”
When deciding to purchase outside of your industry, Branson believes the focus should always be on improving the customer experience.
“Think about changes you’d like to see as a customer – even if you’ve just noticed little details that need tweaking.
“Those little changes may add up to a big idea that leads to a new and truly disruptive product or service.
“This is essentially how we launched our first successful businesses.”
With no knowledge of the industry but plenty of ideas as to how the customer experience could be improved, Virgin Atlantic was born and it’s fair to say that it’s proved its critics wrong.
While Branson is a great inspiration to many small business owners, it’s often hard to take his advice and apply it to situations that include much smaller budgets. To get a more realistic case study, I spoke with Miriam Deitcher of Gobert Smash in Sydney’s south-west.
Deitcher is from the USA and had worked for 18 years as a director of integrated marketing at Progressive USA. During one trip to Australia to visit a friend, she spontaneously purchased equipment from a smash repairer that had gone out of business and decided to open Gobert Smash, a huge smash repair business in one of the fastest growing areas in Australia.
Just like Branson, Deitcher decided to work on perfecting the company’s customer experience rather than focusing on her own lack of experience in the smash repair industry.
Instead of the usual grimy repair shop, Deitcher built a huge, motorcycle-themed garage that includes a fully catered, customer lounge area. She also set (and maintains) core values of transparency and trust for customers and empowerment for all employees.
Has it worked? Deitcher gives us a resounding yes. In fact, within just nine months of opening, Gobert Smash is running profitably and has absolutely no debt.
While the business concept was her own, Deitcher also explains the importance of having a supportive team.
“The smartest thing I did was hire a talented, passionate team, who treat the business as if it were their own,” she said.
“My team basically runs the shop, which allows me to focus on what I’m really good at and truly love: marketing – something my competitors are not so great at, giving my shop a huge edge.”
While purchasing a business outside of your industry experience might sound like a crazy idea at first, the concept is definitely becoming more and more popular with the ‘freelance’ or ‘slashie’ generation.
After all, applying your unique set of business skills to a wider range of industries can be a great way to give your business the edge over the competitor and provide some fresh thinking when it comes to giving your customers something unique.