Published on June 15th, 2018 | by KamikazeXeX0
Top 3 Mistakes You Should Avoid When Finding a Business for Sale
The process of finding a business for sale is one that should be meticulous and well planned. The excitement of finally getting the perfect business that you have been searching for can easily lead you to make costly mistakes that will not only cost you money but also your business. Successfully purchasing a business can be a long process with a lot of checks and balances, but you should make sure you never miss a step. You need to be sure that you’re buying the right business at the right price. Whatever you do, make sure you don’t make these mistakes when finding a business for sale, especially during the purchase process.
Listening to people who are not experienced
Business advice is quite important. However, it has to come from people who have hands-on experience in buying and selling businesses. There are plenty of people who will be more than ready to offer you ‘expert’ advice on matters related to finding a good business for sale, but in most cases, listening to such advice can be a dream killer.
Most people who are not experienced in this line of business will offer you inaccurate information, which can have terrible consequences to your dream of finding a business for sale. This is especially true if you are looking for a business in your local area and solely relying on locals for information. For example, if you are looking for a business for sale in San Diego, a local business owner may not be the best person to turn to if they don’t know anything about the business niche you are looking into. The most experienced people would be business brokers and particularly those that have had direct connections in buying and selling of businesses.
Hiring a lawyer prematurely
As soon as you have a lawyer on board, you can rest assured they will start charging you. If you want to dramatically increase your investment when finding a business for sale, all you have to do is hire a lawyer before the time is right.
Once you identify the right business for you, you should not be in a rush to bring in a lawyer to help you tidy up the deal. Instead, you should take charge of the negotiations, especially if you’re looking to haggle on the price. It is best to have the discussions between the buyer and the business owner directly before a contract is formally drawn up.
After carefully talking to the business owner in person or using the help of a broker, you can then have a framework of a sales purchase agreement that you both agree on and then bring in a lawyer to draft that. This will help you save significantly on legal fees and also save the lawyer time since they will only come in when it is utterly necessary and when you have done most of the rough work and negotiation.
Not doing your due diligence
Any business owner who is looking to sell their business will only share information that is attractive to those people looking to buy the business. It is your duty to try and find out everything you can about the business you would like to buy and more importantly, things that the owner would not share.
You have to make sure you collect documents and as much verifiable information about the business as possible to make sure that you can substantiate all the claims that the business owner is going to make. This might not be the simplest process, but it should not be one that you skimp on. You have to make sure that you verify and cross-check every piece of information about the business you want to buy.
It is imperative to make sure that you are making a sound investment once you find the business for sale you have been looking for. By avoiding these three very common mistakes, you can greatly improve your chances of success and also reduce the chances of being duped into buying a dying business.