5 mistakes business buyers make

Buying a business is not a game and if serious about owning a successful business with great benefits for the owners any Business Purchase, Business Acquisition, or Business Merger needs research and planning. Doing this buyers can avoid the mistakes noted here which can prove very costly.

01Not knowing your business investment parameters: There are many businesses for sale any given day. Being able to focus your search in the right area is crucial to finding the right business for you. Knowing your limitations and so what a business must either have or not have will ensure you find a good match for you. You need to know things such as Budget (Investment limits- cash/ finance), Location, Industry, Style of Ownership (Hands-On, Managing or Investor only), Skills Qualifications essential to success, etc. Research is crucial!

02 Not having finance pre approved: A good business will usually have a number of buyers looking. If your finance is not ready it could mean you miss the opportunity you most value. Modern Business Sales may be able to access some Vendor Finance but relying solely on this will limit your options.

03 Not using professional advice: Accountants, Lawyers and Business Brokers are all experts in various aspects of identifying a good business and or being able to help the sale process for a buyer. Not paying for assistance could cost a buyer dearly in the long run.

04 Not seeing past the finances: Sometimes money and or the lure of it will blind a buyer to their own strengths and weaknesses or those of the business. Sometimes a good business is just not right for a particular buyer.

05 Not respecting the current owner: While negotiating can be a short term gain a buyer should weigh up the goodwill they may need in the future from the current owner against the potential to create a bad relationship by knocking the owners values around unnecessarily. Be willing to recognise a fair value for the business you are now looking to own. A business sale is not a short game, often departing owners have intrinsic value they hold which a new owner may need to call on in the future.