5 Reasons Why We Bought a Zoo is a Poor Business Model
Entertaining movie, poor business strategy
Unfortunately I can never get the whole "willing suspension of disbelief" process down when reading books or watching movies or television. Plot holes can be glaringly obvious. Glossing over boring business facts in a movie is good for the movie business. While a couple of montages of bills arriving and checks being cut gives you the idea of cash flowing out with none flowing in, the core reality of a business with no planning is never dealt with.
1) "Businesses don't plan to fail, they fail to plan," is the motto of the White, Hutchinson Leisure Group. The simple statement reveals the core of the movie's problem. You have to have a firm idea of what you are doing, how much it will cost, and a time line for getting things done. The only part of this that was part of the movie was the plot-device time-line of an inspection needed due before the zoo could open.
2) No employees work for free. While owners of small businesses learn to work for little or no pay while building their businesses, you cannot get employees to work for free. At least not for long. The lovely staff that had stayed on at the defunct zoo in the movie, for two years with no income, is inconceivable. Love of the job is one thing, but economic reality is far harsher.
3) You cannot rely on credit card funding. It is much easier to get a credit card with a $25,000 limit than it is to get $25,000 from your bank. However, the work it takes to convince your banker that you both have a need for the money and a way to repay it needs to be done. It is easy for small businesses to borrow hundreds of thousands of dollars with no plan and no collateral once they've been established. There's a name for businesses that do this: bankrupt. We never see the harsh reality of Matt Damon's card being declined when he goes shopping.
4) You have to study an existing business before investing. Just because your 7 year old thinks that owning a zoo is the greatest idea ever, doesn't make it so. While buying an existing business makes good sense for some, you have to know exactly what you're getting in to. Being able to buy a failing business fairly cheaply because they failed to manage it or market it correctly is a different story than buying a business that failed because times have changed. I do not recommend investing in pay phones or buggy whip factories. We never learn why the zoo lost its accreditation or closed; that's important!
5) Your eyes must be open wide. You cannot let your love of a particular thing cloud your judgment. Remove your rose colored glasses and evaluate the business as a business, not as an extension of a hobby or idea you love. Once again, your 7 year old's love of animals is no reason to buy a zoo. I opened an arcade because I loved games. I failed to do the planning before I opened and played catch-up for years. Had I known what I know now, I would give the advice I have sometimes given when I have been hired as an arcade consultant, "Don't." Following your heart is great, but closing down is heart-wrenching.
I got out easily, I was able to sell off my arcade's games and assets for more than I owed. It took years of hard work and an exit strategy. I planned for a year before my final closing. Had someone chosen to buy my business during that final year, there were things that I had done that would make the buyer's life difficult for a year or two. For me, however, it was the most profitable year of the arcade: virtually no advertising combined with me doing 90% of the work unpaid 7 days a week is not a sustainable business model.