So you want to buy a business, but you don’t want to be the one who manages it day-to-day?

Then you’re gonna need to hire an operator, aka an operations manager.

But how do you find someone to run your business? And also…how do you know if they’re a good manager?

This is a topic that comes up a LOT in our private mastermind group, and so we wanted to break it down for you here. 

If you’re interested in running a business with passive income, sourcing and hiring operators is essential to your success. But how?!

The trick here is in knowing what to look for and what kinds of questions to ask to sense if someone is a good fit for the role you have open.

If you’re new to all of this, here are our recommendations for what to look for in a future operator and the right questions to ask:

1. What previous experience do you have in operating this line of business?  

When it comes to finding an operator, you’re going to want to seek out someone with experience in the exact industry that you’re buying into. This can show up as being a previous owner of a similar business or could also show up as someone who was an employee of this type of business previously. 

Also, don’t underestimate the power of sourcing your operator from a current employee pool who’s shown talent and is already familiar with the current business. This is one underestimated way to find talent without having to source it through cold calling or referrals.

One thing here though…it can be tempting to hire someone who shows promise and a hell of a lot of grit, but who also has no experience in the business you’re buying. The key here really is finding someone who’s familiar and has done this before. It’s really the only way to get momentum on day one and ensure that you’re set up for profit and growth from the start.

Since the ownership transition is enough of a battle already, don’t make it even harder on yourself by jumping into something you and your new operator know nothing about.

Get this wrong, and you run the risk of having to source and solve all of the problems (think maintenance issues, personnel changes, and even operational procedures) as they come up with no prior knowledge. 

If you’re new to dealmaking, this is to be expected, but if you’re a veteran this can be a huge time sink for you and will eat away at your available time (that you could be spent using to secure other deals).

2. What key operational skills do you have?

There may come a time when you need to hire someone who hasn’t worked in the exact industry that you’re sourcing an operator for, but their operational skills are transferrable.

For example, let’s say you have an operator in the mix who has 10 years of experience running their own HVAC company, but they’re bored with just being known as “the HVAC guy.” There are some instances, especially in the service industry, where the operational skills someone learns on the job can be transferred to another industry. 

Let’s say your token HVAC guy wants to expand his expertise into roofing or plumbing or another household service industry. There may be an opportunity for them to expand their knowledge (and talk about something other than freon for a change), without starting over in a line of business where they would completely fall on their face.

Case and point: know the infamous Magic Kingdom in Disney World? You might think that Walt Disney was the brains behind the operation, but the mastermind who originally mapped out the theme park that now averages $19.7 million per day in revenue was a retired army general.

General William “Joe” Potter isn’t a household name like his counterpart, Walt Disney, but he’s the one responsible for the zoning and logistics of the world-famous theme park. After all, who understands crowd control and logistics better than an army general? 

All this to say, there may be opportunities for finding operators in a similar, but not identical, industry, as long as their skills and experience are transferrable. One of the best ways to leverage this kind of talent sourcing is to rely heavily on your network. 

Because you aren’t necessarily looking for someone who’s working in the exact same idustry that they’re in currently, your network is a good place to send your ideal list of qualities and skills and see who might be aligned for the role. There’s always someone who knows someone. 


Yours Unconventionally,

Codie Sanchez & Ryan Snow
Co-founders Unconventional Acquisitions

If you want to learn more about how to find and buy businesses, check out these articles 👇
 

• Is Business Buying Right For You?
• Our Essential List of Best Businesses to Invest and Buy in 2023