Business Buyers 7 Deadly Sins

Business Buyers 7 Deadly Sins


Buying a Business – The 7 Deadly Sins

Buying a business could be the best decision for you but you need to approach the task methodically and with a clear understanding of yourself as well as the businesses you consider. Here are the mistakes many business buyers make.

We call them the Business Buyer’s 7 Deadly Sins:



Buyer Sin #1


Buyer’s failure to seriously investigate and understand their personal financial situation before they begin the process of investigating businesses to buy. How much ready cash do you really have for a down payment? Where is it? Will your family and friends really back you? What are the tax consequences of accessing the cash (401k/IRA)?


Buyer Sin #2


A Buyer’s failure to understand how much money they need to live on, month-to-month. This is often called your “burn-rate”, which needs to be absolutely as accurate as possible, by month, for at least 1 year.


Buyer Sin #3


A Buyer’s failure to understand the difference between profits and cash flow. Profit is what the books say the business made. Cash flow is what cash, the owner, can actually use. You can’t spend profits, you can only spend cash. You can have a lot of profits and no cash.





Buyer Sin #4


A Buyer fall’s in love with a business that makes absolutely no sense for them. Buying a business is a lot like picking a spouse, what’s good for one person might not be good for the next. If you are working with Business Brokers or another intermediary first make sure you understand who they represent in the deal…you or the seller. Then consult with them about the skills required to operate the business and also discuss this in detail with the business seller.


Buyer Sin #5


Getting advice from people who don’t know what they’re talking about. When a business buyer seeks advice about how to buy a business they need to first check out the person giving the advice to see if they know what they are talking about. I don’t care, and neither should you, if your golf buddy the dentist has an opinion on a trucking company. You need to understand what you’re buying when you buy a business, not your neighbor, not your golf buddy but YOU!.


Buyer Sin #6


A Buyer sometimes crosses the line from skeptical to cynical. If you want to buy a good business from a good seller you need to start from a basis of trust but always verify. Also, here’s information about maintaining confidentiality during this process.


Buyer Sin #7


A Buyer sometimes fails to understand why they think they want to buy a business. Are you just worried about getting fired from your current job? Do you really want to make all the decisions? Should you make all the decisions? Are you prepared to have no one else to blame? Can you identify priorities and do you have the self-discipline to manage them?


The good news is you can, if you are honest with yourself, protect yourself from the Buyer’s 7 Deadly Sins above……..




Where can I find information about buying a business in a specific industry?

As we all know the web has a lot of information but often it is hard to sort through the mass to get to the finer topics.

Every Friday, on internet radio, there is a 1 hour broadcast that deals with buying a business in a specific industry. This week’s show (1pm cst, noon eastern) is about trucking companies. These shows feature industry specialists who can provide true insights into the good and bad to look for in a business.

Also, on the Entrepreneurial Insights website there is a menu of many previous shows and the industries they cover. You can replay those shows at your leisure.

Take a look…….and listen to Entrepreneurial Insights , you can visit and replay the broadcast anytime but the live broadcasts are Fridays at 1pm central.

Landscape Business for Sale in Texas


Recognized for excellence, this landscape business is known for its variety of designs which utilizes native Texas and low maintenance plants. Excellent reputation with outstanding and growing plant nursery to supply plants. Business has operated successfully for more than 12 years. The well trained staff is ready to help the new owner succeed. Business is located in growing area with excellent demographics for landscape design services. Excellent real estate included in the sale of the business.

Asking price below includes the real estate valued at  $475,000 (1 .6 acres including improvements).
Client N1293-KT
 Price: $1,400,000
Annual Sales: $2,445,000
Seller’s Discretionary Earnings: $279,000  (profit benefit to owner)
Inventory: $50,000 (Included in Price)
Real Estate: $475,000 (Included in Price)
Financing: Business is pre-qualified for SBA loan with 15%-20% down payment
Year Established: 1997
Number of Employees: 9 full time –
Mgmt. Training/Support: Seller will provide training
Reason For Selling: Retirement
Facilities: 1,200 & 500 sq. ft. buildings; included in sale price

Phone: 281-440-5153

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