Why Is No One Talking About This? | Business Buying
The dark side of buying a business is the topic of today’s reaction video. Matt has lots of experience with helping people buy businesses and tells you some of the things to look out for.
There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!
Video Transcript:
Business Advice Video:
Nobody ever talks about the dark side of buying a business. When you buy a business, there’s a lot of things that can go wrong. And if you don’t know what you’re doing you can find yourself in a poor house real quick. Sellers don’t always tell the truth and a lot of times they hide thing, not always, but sometimes they hide things or don’t place emphasis on things that could be detrimental to you as the new owner. It’s very important when you buy a business to ask lots and lots of questions. You need to take due diligence on your business valuation very seriously.
Matt’s Review:
Well, I certainly agree with that, as somebody who does due diligence projects for business buyers all the time. I definitely agree that sellers don’t always disclose everything especially when it’s not in their favor or not in their interest. And it’s even if they do disclose everything, there’s definitely ways to screw up buying a business. Sometimes you buy it and the customers decide not to keep doing business with you. Or the employees decide not to stay and keep working for you. Or there was just something going on with the seller that you don’t have the same sales skill or personality or connections or whatever else to replicate what that person was doing. Or they just got out of an industry at a good time, right, when things were starting to get tough. Anyway so, there’s definitely a lot of ways buying a business can not work out. And you absolutely need to do your homework. You absolutely need to do due diligence. You absolutely need to ask a lot of questions. And I would say one of the biggest things is trust your gut. It sounds silly but you know a lot of times when you get a weird feeling about something, it’s for a reason. And it’s easy to get excited and start imagining “Oh, I own this, I could do this and that and I grow and I have all these you know all this money coming in every month”. But that’s only true if it works out. And on the flip side, if you borrow a lot of money to buy a business and the business doesn’t work you still gotta pay that loan back. And now you’re gonna be much more stressed and much more depressed than you were before you bought the business. Those dreams aren’t gonna work out but you’re still gonna have that loan to pay off. So absolutely before you buy a business be careful, be sure that it’s the right one, you’ve done your homework, and you really understand what you’re getting. And if you’re not sure, don’t move forward until you get sure.
