Are you considering buying a business for the very first time? If yes, then there are certain mistakes that you should avoid. Many first-time buyers don’t do their research before showing their interest in a business-for-sale listing. Some of the common mistakes are discussed below.
Avoid Over-Focusing on Price
Most potential buyers are overly-focused on price of the business rather than its realistic value. It is important to understand that a great business doesn’t come cheap. You will have to pay a fair price for a great business. You can only get a struggling business at a bargain price. That’s why you should avoid looking for the lowest priced business. A wise approach is to look for the best possible business.
Avoid Asking for Seller Financing without Checking Business Details
Another mistake that buyers make is that they ask for seller financing without even looking at the complete details of the company they are willing to buy. If you are focusing on the availability of seller financing early on, it indicates that you are not a serious buyer.
Avoid Acting Non-Professionally
If you want the broker or seller to take seriously, you should act professionally. Avoid being a “know it all” type buyer. You should acknowledge that you have a lot to learn. You should provide the broker with all those things that they want to see. For example, add in your listing a fully-completed and signed NDA, a summary of your educational and experimental background and also provide them with your financial profile. Without providing seller and broker with this information, you cannot expect them to take you seriously. In addition to this, you should be prepared to discuss your goals and expectations for a company in terms of income, time and other things. Check It: http://www.turnerbutler.co.uk/buyingbusiness.html
Make Sure You Know Enough about the Company You Are Buying
Another mistake that buyers make is that they do not have a clear idea of the type of company they are looking for. Most buyers start off by checking “money-making” opportunities and they look around for different types of companies. As a serious buyer, you should take three important factors into close consideration:
- What do you want to do and why you have an interest in doing it?
- What is the location of the company you want to buy?
- Do you down payment available to buy the company?
What You Should No Say to the Broker?
Brokers can easily detect a non-buyer. This is because they deal with many buyers all the time. According to expert brokers, if a buyer asks any of the following questions, it raises a red flag that they are unlikely to purchase a business:
- I will not provide you with my financial profile as you don’t have to worry about down payment
- I will hire a team to manage the business for me and I will not work full time
- Distance doesn’t matter
In conclusion, avoid making the mistakes mentioned above if you are really serious about buying a company.