Why 90% Of Business Buyers Fail (So You Won’t Fail)!

According to Forbes, the reason why 90% of potential business buyers fail is because most small business buyers are first timers.

The reason why 90% of business buyers fail is because they are first timers, they have never gone through the process before, and they have zero experience in the business buying process.

Most business buyers have never gone through the process of buying a business.

These Newbie buyers may even have the acumen to operate the business, they may already own a business too, but they have zero experience when it comes to the business buying process.

They spend hours searching endlessly through businesses for sale listings, trying to work out which one may be right for them to buy.

Then on the assumption they find a business, after their endless search, they are then not prepared to properly question the seller; they don’t know the right research to do; how to value a business, nor how to carry out a due diligence check either.

This is leaving aside that they are also often not aware of the other ways to find businesses to buy, and they don’t know how to fund the acquisition once they discover that banks don’t like business acquisition loans.

But even if they find a bank that will lend the money; they still need to find the deposit; they need to find collateral for the lending to take place or use a government back program instead, but these take ages to complete. Then finally, they don’t know how to structure the deal to reduce the risks if the deal goes wrong.

Most think they can rely on a business broker to guide them through the process, but it’s the seller who pays the broker commission, and it’s the seller who is their client, not the buyer. So it’s in the broker’s interest to get as much for the business they can.

Trusting or relying on a business broker is no better than relying on an estate agent to trust when you’re buying a property.

Most brokers over-value businesses, so if you rely on the broker, you’re guaranteed to over-pay on price.

Buying a business is a massive decision, and when this is done correctly will bring big returns and an enormous upside, but do it wrong, it can have an horrific downside too.

It’s possible to guess your way through the process, as I did when I bought my business. This was a fitted furniture business with sales at the time of over 1.6 million pounds (or $2 million dollars). But it took way longer that it should have done, and I made mistakes along the way.

Had I known then what I know now, the process would have been much quicker that’s for sure. And I would not have made the mistakes I made either.

The successful business buyer takes time to educate themselves. They get themselves a mentor to assist them in the process, a person who has done it before and has bought a business.

If you follow the right process, once you understand the steps to buy a business, you are likely to beat the statistics, and acquire a business that will thrive under your ownership.

If you have any questions on this topic about buying an existing business, or on any other aspect about the process involved in buying a business, please drop a comment below.

And always remember that no question is a stupid question, if you don’t know it, you don’t know it, and by having the answer to a question you have, might be all it takes to move to the very next step in your journey to buy a business.