Have you sold something for a fraction of what it cost you?

Last week I visited a successful Swedish SME owner here in Jönköping, with an annual turnover of more than 50 million SEK. Sitting around the company's Boardroom table we discussed many business topics and he told me about what lead him to start his own company. In his case like many of his generation he was a employee in the industry for more than 30 years and then he decided to set up his own enterprise. In today´s world many entrepreneurs set up companies whilst at or just after leaving university.

It was then I asked him a very provocative question. "In his business today is there an opportunity or a way of doing something different?"

His answer was as intriguing as it was fulled with wisdom.
As he gazed around the room, looking at the multitude of items used by the company, computers, furniture, coffee machines etc. He mentioned the large amount of inventory in the warehouse. He told of how much energy, time and cost it had taken him and others to set up the company's infrastructure. "TODAY I would purchase an existing company where you can often buy the infrastructure at a highly discounted price." Perhaps the owner has wants to retire or possibly has become a victim of a business down turn, see link below.

My mind was racing ahead, you mean a person could buy a pie making business, but they want to set up a computer service company. Yes, you are a business owner with the emphasis on managing processes. You could possibly hire a pie making expert for the day to day production. The advantages are you have cash flow from day one, you have brought the infrastructure at a fraction of the real cost, and you have those most valuable commodities, time and energy. Remember you can do a Nokia and transform your business in time to whatever service or product you want. Nokia started life as a gum boot manufacturer. A far cry from the high technology world of mobile phones.

In summary

1. Buy existing company infrastructure at discount price


2. Cash flow from day one


3. Maximize your time, energy and money on ensuring company strategies are right ( not on the colour of the coffee room chairs)

So budding entrepreneurs, whilst there are many ways to set up an enterprise, this is one that is seldom considered.

Thanks go to Rolf

Link on business downturn

http://www.thelocal.se/15498/20081106/