Home : Buying a Business: Can You Make a Great Recipe from the Ingredients?

Buying a Business: Can You Make a Great Recipe from the Ingredients?

Posted by Richard Parker on 8/10/2007 at 7:07 AM
Posted in Entrepreneurship

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Imagine you are given a huge list of ingredients and asked to use them in any way you want to prepare an elaborate dish. What do you think your chances would be of completing it successfully without a recipe or any guidance whatsoever?

Or let’s say that someone laid out 300 nuts, bolts, and assorted metal pieces and told you to “put it together” without even telling you what “it” is. Without any instructions, do you think you would wind up building the right thing?

Those situations are a lot like what many people do when they buy a business. They have ingredients or parts, but don’t know the name of the final product that they are trying to produce.

If they are buying a business, they are probably getting ingredients like these:

A product or service
Employees
Revenues and expenses
Inventory
Customers
Suppliers
Systems

What they need is a step-by-step recipe or instruction manual. With that in hand, they will produce the desired results

The recipe is the strategy for combining all those ingredients and creating an overall plan - the recipe - for your business. If you do not have the right recipe, you will have a terrible time trying to make the ingredients into anything other than a big mess.

When evaluating a business, there are several distinct issues that you must address, and many questions to answer. Can you formulate a recipe (plan) that will successfully combine all of the ingredients? Are the ingredients right? Is there any clear and concise recipe in place that is currently being followed by the employees of the business?

With the Right Recipe, Success Can Be Repeated and Expanded

The beauty of a recipe is that it can be duplicated over and over again by anyone. All they have to do is to follow the instructions exactly and it will turn out as planned. Amazing, isn't it? How does this play a role in your business? It's simple! If you want to grow the business to multiple locations, if you want to grow the business by selling more items to your customer base, if you want to operate more efficiently and if you want the employees to be more effective, you will need a recipe that everyone in your company can follow, no matter where they are located and no matter what their job description may be.

So when you are evaluating businesses for potential purchase, determine what the current ingredients or parts are. Can they be combined successfully? Is just one key ingredient missing - something you can add that will turn all the ingredients into a master dish?

After considering those preliminaries, you are ready to achieve success in the marketplace and in your life.

Trump University Professor Richard Parker developed Trump University's self-paced multimedia home-study course on Buying a Business. Professor Parker bought his first business when he was 12 and sold it for a profit when he was 13. He has now bought more than 10 businesses and is a national authority on the subject.

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3 Comments

Posted by Daniela -Madrid on 08/10/2007 10:05 AM

Mr Parker,
the value we build as Real Estate is the most secure asset or it would be ...it affect the business globally the financial catwalk to name it so with your permission, look, as long problems in the U.S. subprime mortgage market have prompted the ECB to inject 95 billion euros ($130 billion) into the European banking system for example, or Fannie Mae and FreddyEx new regulations imposed it affect the global market as waterfall effect and the People as central subject able to produce values depend on the governments, the way to handle the workmarket as a open endless possibilities if oriented the right way..hmm, Mr Parker what we do? study the markets in our field, Real Estate, is what we love to do, but soo many factors influnce it that is better to learn from the Master, avoid to loose terrific precious time on the wrong aspects.
Is a stuffy global market isn*t? and to maintain the right balance , the proper Plan to follow, we learn and ready to work on. Between us, no idea how long it takes that the inflation of the years *70 it takes to balance in N.Y. and the U.S. but I know that it was when the brand Trump it start the hardest way to shine and maintain it until now, high standard. Is sure that for the actual market he know also the right path to folow and want to learn from!
Thank you in advance for the time and patience.
Have a great day,
Daniela

Posted by member1600131 on 08/10/2007 2:38 PM

Hi Richard,
The recipe idea is good. Recipe is the framework, a procedure with precision. The taste of the ready food depends on the right sequence and mix of ingredients. The analogy is valid in business also. what do you want to add into your portfolio? Check out what makes your business boost!

Rajesh Shakya
http://www.rajeshshakya.com
Helping technopreneurs to excel and lead their life!

Posted by lightwayvez on 08/12/2007 2:48 AM

Well I have worked over the summer to evaluate a type of business, and the largest flaw in its recipe, the business plan forcasts the time to assemble however does not take into account the time for which the consumer interrupts the assembly process. The projected sales are not real in this way. To have relied on paperwork and business presentation was not enough.

To simply shop around for a business and not understand its inner workings is foolish spending. Should I make the decision to buy the business I have evaluated over the summer, I know I can make that business run in my sleep because I already made the business what it is over this past summer. Now to me that is a solid purchase should I decide that is the route to take I actually know what I am in for.

Isabelle Morgan

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