We all experience buyer’s remorse at some point in our lives. For me, the ultimate picture of buyer’s remorse was a car; a BMW to be exact. I was young, I was successful, and so I though “why not?” I deserved it, right? I had convinced myself that I needed something to “show” for all my hard work, and I happily took on a $600 a month car payment. Let me be the first to admit that I was painfully stupid. Looking back now, I realize purchasing that car cost me so much more than just those five years of payments. It cost me a million dollars! How? Well, if I had invested that monthly car payment instead, I would have more than a million extra dollars sitting in my account upon retirement. Needless to say, my eye still twitches a little every time I think about it.
Buyer’s remorse is a learning experience, but as an entrepreneur it is the last thing you want to experience. Purchasing a business is a big financial commitment, five years from now, you do not want to look back at your business purchase with remorse. There is no doubt that buying an existing small business is less risky than starting one from the ground up. However, there are still risks involved, and you cannot go into a business deal with only the dream of how great it’s going to be. You have to be smart about it, look at the whole picture. Here we’ve listed three things to keep in mind before committing to a purchase.
- · Whenever you are considering buying a business, you need to look at the business’ books, records, and tax returns. Look out for a seller that does not have them readily available for your review; that is a major read flag.
- · Once you do have the records, you can get a sense of how much money you will make. However, keep in mind you are looking into the past, not the future. There is no guarantee that business will remain the same once you take over.
- · Be suspicious of any buyer that seems to be giving you a great deal during negotiations. If it seems too good to be true… it usually is. Dig deeper, inspect harder, it may be worth the extra effort so that you don’t find yourself purchasing a money pit.
When it comes time to make your business dreams a reality, the last kind of regret you want to ever have is buyer’s remorse. You want to be sure that the business you purchase is not only right for your wallet, but also right for you as the future owner. If you would like to know more about how to maximize your business purchase, we can put you in touch with a professional business broker in your area who can assist you in finding the right business for you. Call us at 1-800-BIZ-BROKER or visit our website at www.1800bizbroker.com.