"According To Industry Statistics Over 90 Percent Of The People Who Begin The Search To Buy A Business Never Purchases One."
A ninety percent failure rate is a very depressing statistic. Even worse, the average prospective business buyer spends 18 months trying to buy one and still never completes a purchase.
So the question every potential business buyer must ask themselves is: “Why do so many people fail and what must I do to become one of the ten percent who succeed?”
Let''s first explore the main reasons why people fail:
Failure Reason # 1: Most Businesses Listed For Sale Are Not Worth Buying
Sadly, the vast majority of businesses that are publicly listed for sale are overpriced and have plenty of problems. There are some decent ones of course, but you need to know how to recognize them, which can be difficult to do from a generic ad or from the seller's sales pitch telling you it's a "wonderful" business with great potential.
Often times, a buyer’s search must go beyond businesses that are publicly listed for sale. Many of the best businesses are not even listed online, or, you may have to contact prospective opportunities directly. Again, this is easy to do; once you know exactly how to do it.
Failure Reason # 2: Too Many Unanswered Questions Equals Buyer Uncertainty
The majority of people whom look to buy a business have never bought one before or they have very limited experience doing so. Buying a business involves a huge amount of critically important decisions that must be made. Facing high-stakes decisions and questions they are ill-equipped to answer, uncertainty creeps in and they simply abort the project.
While there is incredible upside when you buy a good business at the right price and terms, the potential negative consequences if not done correctly can be enormous. When a buyer is not absolutely certain they are making the right decision, it is almost impossible to go ahead and close the deal.
Typical questions buyers cannot answer and so they give up:
- How do I know what type of business is right for me?
- How do I value the business and what is a fair price to pay?
- How can I find out if the seller has “cooked the books”?
- What is the real reason they are selling?
- How do I finance the purchase?
- Will the customers still buy from me after I take over?
- Will the key employees stay?
- How can I uncover all of the problems before I buy it?
The list goes on and on. The good news is there are proven strategies to deal with and answer these questions, but it take very specific knowledge to do so, and without the right information, the entire process can quickly become overwhelming.
Failure Reason # 3: It's Hard To Find Experienced and Trusted Advisors
Many buyers wrongly believe that all they have to do is search business for sale listings and then rely on a business broker or the seller’s word to answer all of their questions and guide them. Unfortunately, it is the complete wrong approach.
Business brokers have their role, but they are paid by the seller and do not represent the buyer. They do not provide buyers with unbiased advice. Their goal is to sell the business - that is how they earn their living. They may provide some assistance, but it is not their responsibility to advise you.
Accountants and attorneys also play a part in this process. However, an accountant's role is limited to validating the company’s financials and assisting with corporate set-up amongst other facets. An attorney can compile agreements but they are not going to conduct an in-depth analysis of the company or be able to tell you whether or not to purchase a particular business.
The Three Steps To Follow For Business-Buying Success:
There's an old proverb that says:
"What's the use in running, if you're running down the wrong road?"
Step 1: Follow the right approach. Spending countless hours searching online business for sale listings trying to figure out which, if any, may be right for you is the wrong approach.
The first step is to figure out what type of business you are best suited to own and then conduct a highly focused search. Further, there are a wealth of good potential business to buy that are not even publicly listed for sale.
Step 2: Become an educated buyer. Buying a business is one decision you must get right the firt time. At each step of the process you will face high stakes decisions and critical situations you have probably never encountered before. There is no room for mistakes.
To be successful you have to make all the right decisions and to do so, you must possess the necessary expertise. There is no escaping the fact that you must be equipped with very specific knowledge in order to make all the right decisions.
Step 3: Get an expert to help you. Align yourself with expert advisors who have been successful buying their own businesses and whose only agenda is to help you.
How To Use All The Helpful Information On This Website:
Regardless of whether you are just starting to look for a business to buy, or you are deeply involved in discussions with the seller of a business for sale, our guides, free consulting support and helpful articles will assist you at every step.
- How to quickly determine what type of business is absolutely right for you.
- The key points to identify good businesses or potential problems in business for sale listings.
- The 36 critical questions you must ask every seller and the answers to look for.
- The most important factors that every good business must have in place for you to buy it.
- A proven formula to accurately value any type of business so you don't overpay.
- How to find good prospective businesses not publicly listed for sale.
- How to properly use a business broker so you'll see the best listings first.
- Proven techniques to follow to favorably negotiate the critical clauses of any deal.
- How to get the seller to finance the deal.
- How to uncover the potential problems in any business which the seller may not disclose.
- If you're considering a franchise, you'll know where to find a successful resale and what to do to investigate both the franchisee and the master franchiser.
- How to recognize and avoid all the costly mistakes that most inexperienced buyers make.
Over the past twenty six years, I have personally purchased thirteen businesses and have since sold twelve of them. I know from first-hand experience how buying a good business can change someone's life. That is exactly what happened to me. The financial and quality of life benefits I have enjoyed as a result have been incredible.
I have also lived the flip-side and the financial hardship was simply awful.
The good news is that buying a good business and negotiating great deal terms is easy; once you know exactly how to do it. But don't fool yourself about what is involved. It takes very specific knowledge to do this successfully and to structure a deal that eliminates your risk.
The guide we offer - How To Buy A Good Business At A Great Price© is a step-by-step manual loaded with proven expert strategies for every stage of the business buying process. It clearly outlines exactly what you need to know, what to do, and precisely how to do it for every situation you and decision you will encounter.
Along with the written guide, you also receive unlimited personalized consulting.
As someone who has been successfully buying their own business for my entire career, I have already dealt with every situation and decision you are going to face and I am available to assist you at any time so take advantage of my experience.
If you have any questions about our program, if you're not sure whether it's for you, or if I can help you with anything at all on the subject of buying a business, please feel free to contact me. It will be my pleasure to assist you - click here to email me .
Thank you for your time and I look forward to working with you.
Diomo Corporation - The Business Buyer Resource Center™
My blog: richardparker.com