The following is adapted from Buy Then Build: How Acquisition Entrepreneurs are Outsmarting the Startup Game and Unlocking Trillions in Value

The Three A’s of Choosing the Right Company to Acquire: Attitude, Aptitude, and Action

Most people start looking for a company to acquire completely the wrong way. They start by thinking about what industry they would like to target. Even most intermediaries start with this question: what type of business do you want to find? Rarely is this the right place to begin.

Successful acquisition entrepreneurs turn the traditional search process upside down. They understand correctly that the building blocks of how to build a company and a vision don’t come from what’s “on the menu,” but from aligning their attitude, aptitude, and action, and leveraging that alignment toward a specific opportunity.

Knowing why and how you will win before you start is critical to knowing what game you are looking for in the first place.

Starting with yourself, and aligning your three A’s of attitude, aptitude, and action, will help identify the right parameters for your search. For the acquisition entrepreneur to find the right company and have success running it, they need to have all three attributes working in harmony.

Aligning all three of these will allow you to move forward with conviction. Without them, you either waste people’s time or risk failure. Or both. To find the right acquisition for you, it’s exactly that—the right acquisition for you. So, start with yourself.

Developing the Right Attitude

All successful entrepreneurs have something in common: a growth mindset. Carol Dweck, a world-renowned Stanford University psychologist and the author of Mindset: How We Can Learn to Fulfill Our Potential, has become the world’s leading expert on the growth mindset—both how to identify it and how to cultivate it in ourselves and our children.

Dweck makes a distinction between a growth mindset and a fixed mindset. A fixed mindset is one that thinks in terms of absolutes, such as, “This is the way things are, and this is the way they will always be.” People with fixed mindsets have core beliefs that reflect it. They believe in limited resources; they believe that people have an innate and fixed level of intelligence and that effortless success is the badge of the truly talented. If someone has to put forth enormous effort, it reflects a lack of skill or talent. They think that effort is a bad thing, exercised only by those who are not smart or talented.

On the contrary, people with a growth mindset view the world as malleable, believing success is achieved through effort. They embrace rather than avoid challenge, and they persist during times of setback. They learn from criticism and are inspired by the success of others. Hard work, good strategies, and input from others are the tools utilized by those who believe their talents can be developed. They put their energy into learning.

If you aren’t currently oriented toward a growth mindset, the good news is that it can be cultivated. We’re all a mixture of a growth mindset and a fixed mindset, but it’s possible to favor the latter. If your thoughts revolve around fearing failure, risk, or blaming others rather than taking responsibility, then you may want to spend some time getting your mindset ready for the job.

Having a growth mindset is often regarded as the number one predictor of entrepreneurial success. It allows a leader to learn from their mistakes and adapt. Knowing that there is always risk that needs to be managed, that rough waters can be successfully navigated, and having an almost relentless commitment to ongoing improvement is what separates the growth-minded entrepreneur from the pack. In acquisition entrepreneurship the stakes are high, and having the right attitude can be the difference between making it happen or sitting on the bench missing opportunities.

The Aptitudes You Need to Succeed as an Acquisition Entrepreneur

Aptitude is made up of both raw intelligence and competencies. These are your skillsets, your strengths and weaknesses.

Raw intellect has been measured by IQ tests for decades. As a result, we have a lot of data around IQ and its correlation with successful businesses results. High intellectual ability is currently the single largest predictor of success in entrepreneurship and in management. In fact, high IQ plus the drive to succeed is the essential formula for success.

That said, there is lots good news. If, like most of humanity, you find yourself somewhere in the middle of the intelligence bell curve, do not fear. First, understand that IQ has had a dominating run over the course of decades as the leading attribute to assess. Many believe, and emerging data supports, that Emotional Intelligence, or “EQ,” will soon trend its way beyond IQ as the leading driver of performance. Second, many other leading competencies are not as innate and can be learned. So even if you already have them in spades, there are opportunities to improve and design yourself into the CEO you want to be.

In business, ambiguity reigns. Being laser-focused is actually a bad thing. Entrepreneurs need to be able to deal with managing ambiguity and a changing landscape; the best ones do this extremely well.

Above all, strategic thinking, persistence, assertiveness, and being achievement-oriented, optimistic, and thick-skinned are the attributes most shared by successful entrepreneurs. That said, most small business owners tend to be very tactical, not strategic at all. If you are tactical, this can be good news, while those who think more strategically, will see benefits in operating at a different level.

There are many other aptitudes possessed by successful entrepreneurs. For example, when you are a CEO of a company, you must be able to sell. This does not mean that you need to commit your time to being a salesperson—that will depend on the type of opportunity you choose.

The ability to grow small companies into big companies will always include the skill of selling, which is a learnable skill, despite the thought that salespeople are either born with this talent or not. Whether you’re selling your services to a prospective customer, selling the vision of your company to the employees, or selling the model to a potential investor, sales skills are a fundamental requirement of growing a business.

There are many more traits we could discuss, space permitting, but the short list above should give you some ideas of the core competencies required to succeed as an acquisition entrepreneur. Obviously, not all successful entrepreneurs have all of these traits at the same level, and some may even lack a trait or two completely, but overall, getting the recipe right with these ingredients is what all the empirical evidence suggests is the winner. Essentially, getting a resourceful and driven individual committed to a good opportunity will win every time.

Base Your Actions on What Drives You

Imagine your perfect work day. What are your doing with your time? What drives you? What activities are you doing when you become completely engaged, lose track of time, or enjoy yourself the most?

This is your “right action.” Having a firm understanding of what you want your daily activities to look like will help you identify the right opportunity. Most business activities are typically divided into two core, overarching functions. One side of the spectrum is revenue generation and the other is operational execution. Are you a grow the top line-oriented individual or are you interested in operational execution?

In other words, do you want to sell more product, or make as much product as possible at the lowest cost? Everyone has a natural inclination toward one side or the other. If you are considering acquisition entrepreneurship, you will need to be able to function on both sides of this spectrum.

However, every potential acquisition worthy of consideration comes with a built-in opportunity. You need to know whether you are growth-oriented or operationally oriented. Moreover, you need to acquire a business where the execution of the opportunity for increasing value matches not only your skillset but aligns with your vision of what you want to do on a daily basis.

Some believe firmly that this activity should be what you’ve done before, something you have a track record of. I find this isn’t always the case, since it depends on which path your career has taken up to this point. The best leaders will know where they are strong and where they will hire—regardless of past roles. Some want to accelerate the activities they’ve done before in an acquisition while others what to change what they are doing. You’ll find either option is available to you, so deciding now will guide your “true north” during the search process.

What activities do you enjoy actually doing? Do you enjoy coordinating lots of people’s activities? Digging into metrics? Calling on big accounts? Solving problems? Those are all great, high-level descriptions, but what about the details? Do you enjoy talking on the phone or managing emails all day? Running daily production meetings? Keeping the accounting tight? Going on sales calls? Managing the depths of an online marketing campaign? Integrating new systems into an organization?

At the end of this exercise, you should have a clear idea of what specific actions you want to be performing in your daily role. Now you can use this information to help you identify the right acquisition entrepreneurship opportunities.

Putting the Three A’s Together

By identifying your three A’s of Attitude, Aptitude, and Action, you’ll have the groundwork done to move forward with the most success possible. Having insight into what makes a successful entrepreneur and how you line up as well will assist in giving you confidence, highlighting the areas where you need to improve or find a partner, and applying the insights about yourself toward the external component of the company you will lead.

You will find there are good, scalable businesses out there, as well as not so good businesses. But objective evaluation of an opportunity shouldn’t begin until you know whether the company profile fits with your goals and skillsets.

Clearly identifying what motivates you, your natural strengths and weaknesses, as well as what you want to actually be doing on a daily basis are all critically more important than what the business does or the opportunity it has. Together, the 3 A’s provide a framework for knowing where you will thrive. When you understand that, you will have a much clearer idea about what you are looking for in the first place.

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Like this? For more on acquisition entrepreneurship, you can find Buy Then Build on Amazon.