Questions for those looking to buy a business

Discussion in 'Growing and Managing a Business' started by dman11, Apr 30, 2014.

  1. dman11

    dman11
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    Anyone here looking to buy/acquire/invest into an existing business? Online or B&M? I've bought and sold several businesses in the past and have a few tech company investments and am looking to share ideas/tips.

    If you're in the search mode, what kind of questions/issues/roadblocks are you running into?
     
  2. Anahit

    Anahit
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    Sounds interesting @dman11, what are the first 3-5 aspects that you are looking in a business before buying/acquiring them?
     
  3. Business Attorney

    Business Attorney
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    dman11, are you asking what is keeping someone from finding a business to buy or what is keeping the sale from closing? For many people, the search is the hardest part. Often that is because the potential buyer really doesn't have a good idea of what he or she is looking for. They simply keep looking until they find something that feels "right." That process is literally like looking for a needle in a haystack. They will look at so many things that are not even close to what they want to buy that they ultimately get what I call "buyer fatigue" and give up.

    Others may have a better idea of what they want but have unrealistic expectations of one sort or another. It might be that they expect a perfectly tuned business that they can simply step into. It may be that they have an unrealistic view of value and expect to pay a super-low price for a business. It all depends.

    Others may fall short when it comes to crafting the business acquisition agreement (see http://www.illinoisbusinessattorney.com/articles/business-acquisition-agreement.html). They may have rushed into a transaction without having fully thought through all of the business and legal issues. When they see the business acquisition agreement and all the details of the representations and warranties (and the due diligence needed to determine whether the reps and warranties are in fact true), they freeze.

    What tips do you have to offer to a potential buyer who is hunting for a business to buy? Given your experience, what do you see as the most common questions/issues/roadblocks a buyer faces?
     

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