Article 2-16

Buying a Business or a Franchise

When you are considering buying an established business or a franchise, you may have limited opportunity to change the numbers. Unlike starting your own business from scratch, one of the benefits that you hope to achieve in a purchase is the established goodwill of an ongoing enterprise.

If the numbers of the business under consideration are incompatible with your personal numbers, you need to have a plan to create a successful match. In the worst case, you may just abandon the purchase and look for something more suitable. But if the business available for purchase is otherwise very desirable, there are some possible fixes.

The franchise purchase is more rigid than a separate business. For a franchise you may be extremely limited in the modifications that you can make. In a later article, we will discuss the numbers of some of the more popular franchises, and if possible, find how the more successful franchisees match those numbers.

This discussion will be limited to a straight out purchase of a business. To maintain the established business, you need to keep the business name that has become recognized by the public. If you make a total name change you will need to start over to establish the new name. With this approach you are throwing away much of the value that you are purchasing.

One solution is to make a slight modification of the name that creates numbers compatible with your own, but is still recognizable as the original business.

In working with one professional practice, we ran into a business name that had less than optimal compatibility with the primary practitioner. In running the numbers, we found that merely by adding an "s" to the name the energies could be brought into line. This change was easily made, and did not strain the logic of the name. The basic name of the practice was not changed beyond immediate recognition by the patients. The new energies incorporated by the change should open the practice to greater success.

Even this simple a change, however, must be done carefully. By adding a single letter, the energy change became less compatible with one of the other professional staff members. In this instance, the change worked because this other therapist was already considering moving out. In other cases, further consideration would need to be given to the energies of all the primary people involved, and such a simple fix would have been less satisfactory.

Without having run the numbers, I am aware of a number of businesses that have been purchased and some interesting name modifications that were done. A widely know example is Ruth's Chris Steak House. It makes the name a bit awkward, but it kept the name "Chris Steak House" intact, and added "Ruth's". I do not know whether Ruth used a numerologist to determine this name or whether she went with an intuitive sense of the rightness of the new name.

Another example here in Indianapolis is Gene Beltz Shadeland Dodge. The same circumstance is at play here. When Gene Beltz purchased Shadeland Dodge, he wished to keep the goodwill of Shadeland Dodge, but also wanted to establish his identity in the business.

Both of the name changes in the example businesses apparently worked, because both have continued to be successful over a number of years since the change.

Sometimes you can play with various combinations to find one that works for all who are important to the business. Sometimes it is preferable to pass on a purchase and seek a better match.

You may republish this article without charge, provided that you make no changes to the content and keep the signature box intact.

Return to Archives Index