There is a saying in business that has really resonated with me this last year.
“The early bird gets the worm, but the second mouse gets the cheese.”
Most start-up businesses are mouse traps. 90% of them fail. Most budding entrepreneurs think they’ll be one of the lucky ones. They try to be smart about it, work hard, then SNAP!
The business collapses, or a competitor comes along wipes them out, and their hopes, dreams, and investment suffers a painful death.
At best, they sell the business for a fraction of what they put into it.
That’s when the second mouse swoops in.
Look at Ray Kroc who took over from the McDonalds brothers, Samsung after Nokia, or Facebook after Myspace.
These are obviously famous examples, but when it comes to small startups, such incidents of piggybacking are the norm, not the exception.
There’s a reason why we fail. Starting a new business from scratch can HARD AS HELL. Profits suck in the beginning. There are high barriers to entry. Paperwork, bureaucratic delays, unexpected setup costs—the list goes on—and that’s before you even go looking for for your first customer!
Instead, why not just take over an existing business with momentum and avoid most of these pitfalls? Take somebody’s else idea and simply copy or refine it.
My Personal Experience
I’ve been the first mouse many times in my life, but I’ve learned my lesson. All three businesses that I acquired in the last year or so were existing businesses.
My first business was originally a dive bar. A married couple set it up with high hopes, but after a 10-month delay for planning permission, they were broke and badly in need of investment and professional advice. Beer crates were being used as stools. It didn’t help that the bar was super lit up with harsh white lights either. I offered to help, but they refused.
Fast forward a year. The struggling business destroyed the marriage, the husband fled the country, and now the wife’s life was miserable. I took it over for a bargain, refurbed the place with my family, and within a few weeks, it became a six-figure business.
The second business was a failed bistro. After the bar became the highest rated in the area, I attracted investment for a second location, and we found the perfect spot.
Bistros do well near offices and commercial areas, but this place was in a quiet residential area and the business wasn’t there. It made no sense. It had potential a bar, however…cheap rent, plenty of outdoor space, and a food licence. More importantly, there was no competition around.
We bought them out, refurbed, and created a sister bar. My talented brother moved over to manage it, and when we opened this summer, success came instantly. We now have over a dozen staff and are on track to turn over nearly half a million next year.
The third business opportunity came when one of our favourite beer suppliers informed us he was shutting up shop. He was juggling with a full-time job, and with the extra workload, stress, and labour costs, the juice just wasn’t worth the squeeze.
“Backwards integration!” I thought.
All the hard work was done. Existing clients aside, we could become our own best customers—halving our beer costs, saving a fortune on tax, and winning profits for all businesses. Worst case? We learn a ton about import and distribution. I partnered with my brother, the owner gave us a super affordable price, and since we took over in September things have been going great!
It’s good to be the second mouse.
What can YOU do to get that cheese?
Maybe you can afford a franchise.
Or maybe you know a failing cafe in your town that ought to be a pizza place.
Perhaps you know somebody with a great business idea, but they’re unorganised and don’t know how to market themselves.
Maybe you’re in a place where the competition is weak. The owner is cheap and his staff are miserable service because they’re underpaid and sell crap. You could wipe the floor with him.
Look for opportunities where others are not, and go get that cheddar.
Anyway, I hope this post has some of you thinking differently. If you liked the article, have any questions, and have had similar experiences to myself, please drop a comment 🙂