Buying a business is a huge decision. You are deciding on a whole new life and are about to write a very big check.
We get that.
A minor case of cold feet is absolutely to be expected with a decision this big, but the mistake many business buyers make is they allow their cold feet to become a major problem. They let their hesitation overshadow their rational side – and they slow the buying process to a near halt.
This will always cost you money.
We aren’t saying that you should immediately buy the very first business you look at. You should absolutely take a reasonable amount of time to make decisions about the business you ultimately buy.
What we are saying is you shouldn’t procrastinate indefinitely. If you’ve found a good business – put in an offer. If you don’t, you risk several scenarios that will mean more money out of your pocket.
The sellers could decide to raise the price. Many new buyers think that this move is unfair, but a seller is completely within their rights to raise the price of their business if no written offers are currently on the table. If the business is experiencing a period of tremendous growth or if the sellers are seeing a lot of interest in their business and are hoping to cash in on the popularity of their listing – they might decide to get more bang for their buck and jack up the price. If you haven’t put in an offer, your only choice will be to pay the new price or move on.
You risk taking over the business out of season. If the business you are considering is in a seasonal market where businesses do well for part of the year and then have to survive the lean off-season (common in areas where tourism is big) dragging your feet could mean you get handed the keys right as the slow season starts. This could force you to eat up your working capital surviving until the busy season starts again instead of using that working capital to grow the business during the period of the year when customers are flocking in your door. Help yourself by using the timing of the sale to your favor. Don’t procrastinate yourself into a rough six months.
Another buyer might buy the business out from under you. Time is money, so if you are constantly losing out on good businesses because you are waiting too long and other buyers are pulling the trigger before you do – you will be perpetually stuck in the search phase of buying a business. It takes a fair amount of research time, search time, conversations, meetings, conference calls and the like to narrow down your business choices. Don’t waste all of that time (and therefore money) by prolonging your decision and losing out to a more decisive buyer.
You have every right to be nervous about your decision to buy a business, but the most successful small business owners are those who can be rational and decisive when it counts. Do yourself a favor and don’t wait.
Are you thinking about buying a business but are nervous about taking the plunge? Would you like to know more about the process to buy a business? Please feel free to leave any questions or comments and we would be happy to help.
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Fort Myers, FL 33907