What Is The #1 Biggest Mistake Buyers Make When Buying A Business?

The 2nd biggest mistake a buyer makes (I will be getting to the number one shortly); is not finding out why the seller really wants to sell his or her business.

“When purchasing a business, it is important to look for what problem(s) the seller is having that he cannot solve.” Says Willard Michlin, of Michlin & Associates, the Business Services Professionals of Southern California; People he continues, “Rarely sell businesses just to retire. There is almost always some problem they cannot solve. It may be a physical condition they have or an emotionally upsetting situation, employee problems, legal actions, a profitability issue, or it just might be the competition is cutting their throat.”

From his viewpoint, the job of a buyer or his financial consultant is to find out why a seller really wants to sell. Questions are suggested that must be asked; such as: Why does the seller want out, this year, rather than 5 years ago or next year? When you find the answer to the seller’s motivation, you can then determine the true value of the business and the validity of the information you are getting from the seller.

It is said that once you figure out if the problem is fixable; by you or any one else, you can proceed with the deal, but: “If you are just buying the sellers problem, and cannot fix them, you are not going to be successful in that business.”

So, “what is the number one mistake a buyer makes when buying a business?” It is, says Michlin, unfortunately, “accepting what the seller tells them as the truth, which results in not continuing to do the vital and necessary due diligence!”

For more information contact us at business@businessbuyingservices.com or visit our website at: www.businessbuyingservices.com/services.asp Willard Michlin is a Business Broker; California Real Estate Broker. He is also an accountant, a Well-known Public speaker and Administrative/Business Consultant.

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