Tuesday, 30 August 2011
Why a business sale falls apart, how buyers can prevent.
When you consider the complexities of a business sale, it’s no surprise there are a number of reasons why a transaction can fail to close. The reason some deals unravel is caused by the seller, however, many are caused by the buyer. Unfortunately, the reasons are numerous but most can be resolved.
Buyers can often times exhibit the same tendencies as Sellers. They may have unrealistic expectations regarding the price of a business. Or, they may have an urgent “need” to get a business but lack the courage to take the “leap of faith” necessary to go through with the sale. Sometimes, they may have experienced some recent financial setback that impacts their ability to meet their financial obligation as part of the deal.
Similar to sellers, there are things buyers can do to increase the likelihood of finding a business that is right for them and increase the likelihood of a successful transaction:
· Be open and honest about your skills and competencies.
· Create a personal financial statement; understand your financial position.
· Get comfortable with the amount of investment you are willing to make, and stay within your means.
· Establish what level of risk you are willing to take.
One thing a buyer should not be concerned with, on the outset, is what type of business they are looking for. It is typical for buyers to know what they are not looking for, but not know what would be of interest to them.
Buying a business can be rewarding, but it’s not for everyone. For buyers, using a broker allows them to follow a step-by-step process while remaining focused on choosing the right business for them and the pending matters associated with operating it.
Do you have small business questions you would like answered about this article or others? Please visit www.VRWindsor.com or call 519-903-7807.
William Sivell is a sales representative of VR Windsor Inc., Business Brokerage; his blog appears every Tuesday.