Buying Guide: New England Inns & Bed and Breakfasts

Why Buy an Operating Property

Buying an existing property is just the right thing to do for some people. This article is about what you, the individual acquirer, might want, and what you should expect to get, if you decide this unique and special “buying–an operating property” path is for you. Those of you who are individual buyer prospects are usually looking for a property that will employ you as owner/operator. Because you are investing your hard earned money, you want to know that it’s worth it. You want to “run your own show,” an unparalleled personal growth experience. In New England, especially, we buy businesses that improve our lifestyle. In some cases, it’s more than lifestyle–it’s a personal mission! We intend to leave our mark. Can you reasonably achieve these objectives with a purchase? Yes, you can!

What You Want

Job: Owning and running a business is usually a full–time job. It offers unparalleled freedom of action. You may work very hard, but you will enjoy freedom that no salaried position can give. That’s worth a lot.

Personal Growth: Owning and running an operating property makes you smarter! And, who among us doesn’t want to be smarter? Working on, and in, your own business will challenge you in every area you can imagine. Most of us don’t grow until we have to. Necessity is the mother of invention. Owning and running your own small business requires you to learn “Street Smarts 101.” It puts you on a personal growth regimen.

Lifestyle: In New England, owning an operating property is “the way life should be.” It’s your chance to use the skills you love. It’s your chance to do the part of the job that you like and hire someone to do the parts you’re not so good at. If your property is located near lake or ocean, forest or mountain, it really does allow you to experience a unique “lifestyle.”

Legacy: Making a difference is an everyday experience when you own an operating property. Your family members, employees and customers are all looking to you to set the pace. Solving business problems always presents an opportunity for deeply touching someone’s spirit. Who doesn’t remember a teacher in their life that made a difference? Owners are always teachers. It happens at the workplace, but also in the home. Nothing will instill the “entrepreneurial spirit” in someone else like watching you succeed at running your own show.

What You Get

So, what do you get, specifically, when you buy an operating property? Why not just start your own? Wouldn’t that be more fun? Aren’t you just buying someone else’s problems?

But, it takes more time to get going when you start your own. It’s riskier–the chance to fail is much greater. It also costs more, not just in time, but in lost financial opportunity.

Buying an existing property gives you a leg up–several, in fact.

Immediate Cash Flow: An operating property provides repeat customers. Vendors are frequently willing to extend credit to a proven property more so than a new one. A “turn–key” property is what you get. Instead of starting from scratch, which can chew up mounds of working capital before the first customers even realize you exist, buying an operating property provides immediate cash flow.

Known Market Position: “Location, location, location” can be more than just a reference to the right real estate choice. It’s also a position in a market. In a purchase, you know where you stand. In a start up, whether or not you will be able to create such a position is a complete unknown.

Working Systems: Don’t underestimate the importance of operating systems that make it all happen. In a successful, established property, these systems are in place. Remember the last time you did something you never did before? Well, when your money is on the line, you want a property with proven systems, not a first–time–out experience. Buying an operating property gives you working systems.

Seller Assistance: After the the purchase and sale process, the seller may very well be a fountain of wisdom, energy and help. Even if you don’t follow all of their advice (they don’t expect you to, anyway), it is still worth listening to. They know answers to questions you forgot to ask before you bought–ones that it might take you years to learn if you were starting from scratch. And, did we mention seller financing? Yes, sellers will often even “play bank” for you–becoming a “partner“ in your success. There is nearly always a good reason to take advantage of a seller’s assistance.