The question that i am asked most frequently is: ” What is the most important thing to do in order to purchase a good business?” Through experience, I realized that there was only one way to buy a good business at a great price. As you navigate your way through the way the maze of studying, searching, meeting, negotiating, evaluating, investigating, researching, renegotiating and closing: there is one common thread to each part that can dramatically increase your chances of success. You may be asking: What is it already? It’s really simple; it’s called KNOWLEDGE! Every single step that you take in the buying process must be done with an educational foundation. If not, you will get lost in the maze! If you commit yourself to fully understanding the strategies that I an other successful investors use, you will make good decisions.
Being in Private Equity and Brokering I have heard of far too many horror stories about peoples dreams of buying a business turning into nightmares. When question further about what went wrong, each one, without fail says ” I bought a bad business.” Make no mistake folks, these people didn’t “BUY” anything, they were in fact “SOLD,” and in turn ended up paying for their mistake.- big time. In fact some may have trouble recovering from it during the course of their life time, so How do you avoid making this mistake?
Don’t let anyone sell you anything! The only way that you can avoid being “sold” is by making an informed decision to “buy.” Don’t lose sight of this! Allow yourself the time to fully educate yourself so that you decide if you want to buy something. Given the enormity of this investment, doesn’t it seem wiser to make the most educated decision possible? Keep in mind that the Seller, The Broker, the banker, the suppliers, and many others will all want you to buy the business. It’s too their advantage. If, by some chance, you deal with someone who discourages you from buying a particular business, pay very close attention to what they are saying. Buying a business may be the biggest financial endeavor you undertake. You owe it to your self to make an educated decision.