When Insider Business Deals Go South:
May 1, 2023
The 5 most common mistakes buyers make when buying a business
Not Seeking Professional Help:
One of the biggest mistakes buyers make is not seeking professional help. Buying a business is a complex process that involves many legal, financial, and operational aspects. A business broker can guide you through this process, help you find businesses that match your interests and budget, assist in valuation and negotiations, and facilitate the due diligence process. We can also help connect you with other professionals such as attorneys and accountants who are skilled and experienced in these transactions. Trying to navigate this process without professional help can lead to costly mistakes and oversights.
Not Conducting Thorough Due Diligence:
This is probably the most common mistake. Due diligence is the comprehensive assessment of a business to evaluate its commercial potential. It involves reviewing financial records, legal issues, assets, liabilities, contracts, and more. Failing to conduct a thorough due diligence can lead to unfortunate surprises after the purchase.
Underestimating Capital Needs:
Many buyers focus primarily on the purchase price of a business, without considering the ongoing capital needs after the purchase. It’s important to estimate the working capital you’ll need to run the business effectively, including funds for potential improvements, expansions, or unexpected expenses. Running short on cash post-acquisition can put the business at risk.
Not Planning for the Transition:
Buying a business is just the first step. The transition period after the purchase is critical for the success of the business. Without a well-thought-out transition plan, the business may face disruptions that can affect its operations and financial performance. It is common practice to negotiate a “training” period after the closing when the seller will help with the transition.
Neglecting Non-Compete Agreements:
If the seller of the business starts a new, similar business shortly after selling, they could become a significant competitor. A non-compete agreement can prevent this from happening. Not insisting on a NCA can potentially harm the business you’ve just purchased. Always consult with an attorney about the enforceability and scope of non-compete agreements in your specific situation.
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About Us
As one of Florida’s top Business Brokers I can help you find the right business and assist you with obtaining financing. There are five things you should know about my services.
One Broker
As a member of the Business Brokers of Florida (BBF) I cooperate with over 1,000 active business brokers in the State. This means that when you work with me you have access to the listings of all these agents.
Experience
I have been a successful business broker for over sixteen years. I hold the prestigious designations of Board Certified Intermediary (BCI) and Accredited Business Intermediary (ABI). Prior to becoming a business broker I ran a successful small business for many years. There is no one better equipped to help you buy a business
Technology
I utilize the latest technology to minimize the disruption to your busy schedule. Digital signing of documents along with Web Meetings and Video Conferencing will cut out much of the time consuming leg work.
Cost
In most instances the Buyers Broker is paid by the seller at closing. This means that the valuable service we offer comes at no expense to you.
Network
I cooperate with a Network of professionals eager to help you reach your goal. Whatever advice you need I can recommend the right professional to assist you. Let me help you make your dreams come true in 2023.
Learn more
View my collection of informational videos or read my blog. Visit me online at www.qbusinessadvisors.com or call me today at 904-725-7677. I look forward to helping you.
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