Hi there everyone, it’s me, Dave Barnett from www.DavidCBarnett.com. Watch the video here: https://youtu.be/mZBIFjTAsKk
I received another viewer question from Bruce. He asks, ‘What are the common pitfalls that buyers get caught in when trying to buy a business?’
It’s a great question and one that I’ve received in various forms from dozens of readers and viewers.
I actually sat down and tried to come up with a list of the most common problems to try to address in a video or series of videos. When I was done though, I had over 20 items. I knew that I couldn’t cover them all in one video.
I’ll tell you a few of them here but it gave me the inspiration for a special report that is about 30 pages long that you can download here: https://gum.co/21stupidthings
Also, it’s not free, but the price is very low. That’s because the information is actually very valuable and I only want to share it with people who are serious about taking the right precautions when embarking on a project as complex as buying an existing business.
Here’s a quick list of some of the stupid things that buyers do which I cover in the report.
· Failing to understand how businesses are valued
· Failing to account for the value of their labour
· Failing to adjust for operating capital
· Over-committing cash flow
· Underestimating the value of their own capital
· Failing to get the proper help
· Failing to get help
· Asking the wrong people for help
· Failing to make a reasonable projections
· Failing to consider capital expenditures
· Failing to do proper due diligence (there are 3 pages on this.)
· Failing to create mechanisms to hold the sellers accountable to what they say
· Failing to properly do research
· Failing to understand the risks of the franchisor fails
· Failing to understand the importance and power of a landlord
· Failing to budget properly
· Failing to have a reserve for cash
· There are a few bonus ones in the report as well, making the list longer than 21
This gives you a snapshot of the everyday problems I see when helping buyers work on their deals. Unfortunately, I get called in to help people sometimes after the deal is done and have to show them where they went wrong and how they may be able to get things back on track. Usually, it means that the buyers have already wasted tons of money.
If you want to learn the full three-step process of how I help people buy businesses (it starts with education) then you should visit www.BusinessBuyerAdvantage.com.
Thanks and we’ll see you next time. If you found this video/article useful please like it and share it. It helps move the video up on search ranks so that other people like yourself that are looking for this kind of information can find it easily.
Thanks guys, I’ll talk to you soon.