from the desk of Denis
J. Burke, MBA
Senior Business Broker
Common Mistakes Buyers Make
- Did you know that 80% of Business Buyers have never before owned a business and have
NO IDEA what type of Business they WANT to BUY? Consequently, when someone doesn’t know what they want, it is very difficult to help them.
Solution: Buyers should take time to make a detailed list of Business Criteria that will meet their professional, financial and lifestyle goals ever before they start looking to BUY. When one is ready they ACT from a position of strength.
- Buyers waste a lot of time on a virtual merry-go-round circus looking for Businesses that they don’t qualify for either because they don’t have enough money, adequate experience or business knowledge. Many are just looking out of curiosity
Solution: Buyer should hire a Business Broker that has extensive business knowledge, experience and education. Find someone who has an entrepreneur background and knows about Business Ownership, Finance, Marketing, Valuation and Commercial Real Estate(Real Estate is part of every Business Purchase).A good Business Broker can save a Buyer time, emotional grief and money in doing research and matching the Buyer with a suitable business.
- Many Buyers make believe they know it all when it comes to Buying a Business. Buying a Business is an involved and complex process. Virtually no real information is available to the general public on HOW to Buy or Sell a Business. For example, in Florida and in 16 other states, Business Brokers are required to be licensed. They take specialized classes and must pass a difficult state exam. Continuing education is ongoing and required to maintain licensing.
Solution: Buyers should be willing to Listen to good advice and Learn. An informed and decisive Buyer will be more successful and effective at Buying their dream Business in the shortest period of time.
- Buyers get caught up in mass confusion fueled by curiosity about listings they see online. Granted, there may be over 100,000 Businesses and Franchises on the market for sale at any given time making the buyer selection process even more difficult. However, much of the confusion arises when Buyers contact numerous Business Brokers online with regard to various listings and when responded to by those brokers, the buyer can’t recall who they contacted or which listing.
Solution: Buyers should be aware that Brokers coop with each other in most cases and Sellers pay the commission. As a Buyer, your confusion can be reduced because you only need ONE Broker to do the transaction. Loyalty matters! Find a Broker you like and trust to advise you. It’s also common that a Broker will act as a transaction agent between Buyer and Seller. In such cases, the broker has fiduciary and ethical obligations to both parties in accordance with state licensing.
When you need Expert Business Advice email Denis@BusinessBrokerWorld.com