You are finally ready and have decided leave the corporate world and buy a business, and you've started to look. You have decided that you want a [fill in the blank] business but you just can't seem to find one. Either the broker doesn't respond, or can't provide you a basic financial snapshot about the business. Further, you are pestered to make an offer on the business when you don't feel you have enough information.
Nothing makes sense; you are tired and frustrated. Yet you keep responding to ads and calling brokers. Stop right there! Haven't you been told that insanity is doing the same thing, the same way, over and over again, expecting a different result?
Here at
Firstbuysell.com, we get e-mails, phone calls and talk to hundreds of people just like you every year. Most prospective buyers want a good business, yet when asked what that means, there is a long pause in the conversation.
The biggest problem I face in trying to help is that most prospective buyers don't know what constitutes a good business for them. It is like calling a travel agent to tell them you want to plan a trip, but you don't know where you want to go, how long you want to take, or how much you're willing to spend. If only buying a business were as simple as planning a vacation. Buying a business is a serious life choice, however, and you need tools to help you build that ideal business model. Without a model, you won't know what you're buying, and mistakes can be costly if not life-shattering.
Many prospective buyers also think that they will be able to find a good business for 10% down, have four weeks for due diligence, have a 30 day no obligation trial at the business, and six months free training from the seller. Unfortunately, it is a sellers' market today, with a scarcity of good, profitable, cash-flowing businesses from which to choose. Add to the mix an abundance of qualified buyers and willing small business lenders, and you'll have a closer picture of reality.
Take a step back for a moment. Most prospective buyers don't know what they are looking for, don't have a reasonable list of criteria, haven't done any research to financing options or market costs of business, or thought about the implications of business ownership to them or their family. To begin their quest, many prospective buyers read books about buying a business that were written too many years ago. Save your money, those books are about as useful as a corded telephone or a Betamax.
So why are you having so much trouble? It's simple really. Business brokers rarely take the time to educate their prospective buyers. They rarely spend time helping their prospective buyers to understand what they are actually looking for in a business. I find that strange, since my experience tells me that 95% of the people I talk to, who actually buy a business, do not buy the one they have called to inquire about. My best advice is to find a broker who will work with you to help you to build a reasonable list of criteria that fits.
Planning a transition as important as buying a business demands a lot of care and consideration, and ideally conversations with a broker knowledgeable in guiding buyers to making the right decision. I know that you do not want to make a mistake. If you simply put some time and effort into defining what you are looking for in a business, make sure it is a good fit for you, and do your due diligence, you have a better chance for a successful future.
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