What is it about most of us who decide that “cheap” is better? We do it when buying clothes, shoes, furniture, car, etc, only to find out, in most instances, that our decision was not a good one. Why?? Because in the very short term, clothes look like hell and soon deteriorate, shoes fall apart and last only a few months, and our furniture rips apart easily, forcing us to go buy the same things within months– doubling our expense!! We do the same when buying a house. We forgo the best location–in front of a lake or preserve– to save a few thousands only to lose thousands more at the time of sale. Remember, location, location??
Unfortunately, the same thing happens when selling or buying a business. Some examples: Business Broker Florida
1. Sellers normally look to lower their commission on the sale of their business, instead of looking to get better results. Most good Business Brokers charge a premium 2% over their competition because they know they can get you a better price. Do the math. If the good broker sells your business for 100% of its value and a mediocre broker sells it for 75% of what the business is worth, you actually loose 23% total!! Not a good deal, but a daily occurrence.
2. Buyers decide not to use a lawyer fearing a $1000.00 plus charge and eventually find themselves losing thousands of dollars in litigation fees.
3. Buyers decide not to use a CPA/Accountant to perform a due diligence on their purchase (they do not want to spend the $500-$1000 required) only to regret it and lose thousand of dollars, if not all of their investment in the process.
4. Buyers want to buy a business based on price (normally lower price) rather than looking for a quality business with great bottom line results. Crazy!! It is better to pay $50K more for a business than to lose $100K on a bad business during your first year of operations!! Right??
So, please do what makes sense when selling or buying your business. Stay away from “cheap” and get quality instead-get professional help when buying or selling your business.