A Business is a living, breathing entity, and it is subject to certain life cycles, which I describe as “Three G’s to the Top of the Hill.” The bottom of the hill is Garbage, the middle of the hill is Good and the top of the hill is Great.

For the purposes of this explanation, I want you to think of Garbage in two ways. First, every new business starts out as Garbage. Second, it’s where every Business will wind up if it falls backwards.

You may be saying that if a Business is Garbage, it represents opportunity because there’s only one way to go, and that’s up. But to me, no matter what you try to make of it, it’s still Garbage.

A Business that is in the Garbage stage has nothing but problems, just like a bad used car. Sure, you may be able to buy it for a cheap price, but your chances of success are almost zero unless you have a wealth of experience in turning Garbage into gold. Do not try to convince yourself that you can do things to the business that the current seller hasn’t done. While I subscribe to the fact that there are more bad owners than bad businesses, there is no shortage of bad Businesses on the market, all neatly wrapped and packaged to appear decent.

The climb from Garbage to Good is extremely steep and, if you do not make it, you will be stuck with Garbage.

What About Buying in the Good Category?

I am glad you asked, because that is exactly where you want to begin, and you can completely avoid the Garbage stage. This is the real beauty of buying an existing Business - if you do a careful analysis, you will know the potential of your new enterprise.

The climb from Good to Great is less steep than from Garbage to Good, and along the way there are places to land if you should stumble. In fact, your goal should be to buy a Good business at a Great price, which is quite different from looking for a Garbage Business at a cheap price.

You can then be at the helm while it ascends to greatness, and you will develop all of the tools for an intimate understanding of what is takes to continue to grow.

Why Not Buy at the Great Stage?

Now at this point, you are probably asking why you shouldn’t just jump to the top of the hill and buy a Business that is already in the Great category. Well insofar as the Great position is concerned there are some problems:

Because you pay for the past, you will have to pay a massive premium, which for most buyers is not possible. The chances of making a Great business even better are slim. Unless you have extensive experience in the industry of the so-called Great business, you will not be able to sustain its performance. Then there’s another question - If a business is so Great, then why is it being sold? You need to know how to tell. That requires the kind of expert-level skills that I teach in my course, The Art of Buying a Business. If you’re serious about moving from Good to Great in your own life as an entrepreneur, I’m here to help. Investigate my course and I know you will want to get involved.

Trump University Professor Richard Parker developed Trump University's self-paced multimedia Home-study course, The Art of 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.