The 17 Worst Mistakes Buyers and Sellers Make

1. Trying to buy or sell a business without full accountant's figures - a 'she'll be right' attitude can send you broke!

2. Over-valuing or under-valuing the business - you need to know what the market will realistically pay for the business. Our experience and Benchmarking data can be invaluable in getting this right.

3. Not having your solicitor check lease properly - oops, all dressed up and nowhere to go!

4. Not picking up incongruities between the Gross Profit % and Net Profit % to turnover ratios - the hidden difference between a profit and a loss in many cases.

5. Not thinking enough about or understanding the true nature of the business compared with what you have been doing previously - e.g., does it involve evening work, weekends, 7 days, working with public. Are you prepared for this?

6. Not ensuring your partner/spouse likes the business too - if they don't, you've got problems!

7. Not factoring in the travelling time to and from a business - you'll probably be working longer hours than a normal job, so extra traveling time can be a killer.

8. Buying a business beyond your skill level to manage - e.g., if you don't have high people skills, don't try to manage people.

9. Buying a business for a son or daughter where there is no 'hurt money' involved on their side - this almost always causes problems and business failures, and family crisis!

10. Paying too much attention to overly pedantic professional advice - doom-sayers who only see 'worst-case' scenarios instead of the reality. Every business, even a post office, carries a certain amount of risk. There is no such thing as a 'risk-free' business.

11. Paying too much attention to 'armchair experts' - most of whom will never have been in business for themselves.

12. Paying too small a deposit. A reasonable deposit figure, say between 10% - 20% clearly says to the vendor that you're serious. It also lowers your debt level and reduces your repayments, which can be a huge advantage while you're 'growing' the business.

13. Trying to 'steal' the business by offering an unreasonably low purchase price - someone else will come along and snap it up from under your nose - we've seen it happen time and again.

14. Trying to deal directly with either the Purchaser or Vendor, particularly unscrupulous Vendors who don't want their business scrutinised by a professional broker. We know exactly what to look for - do you?

15. Trying to 'back-door' the broker once the deal is in play - why would you when we're there to make sure everything happens smoothly, properly and in everyone's best interests.

16. Not having enough stock - funding for sufficient stock is something you have to allow for in your total acquisition cost.

17. Procrastinating - if you've done your homework and it all adds up, ACT! Don't be frightened to put a contract on a business that looks good, as soon as you see it. The contract has an 'out' or escape clause in that the 'Due Diligence' still has to be completed by your accountant and if it shows up something that is seriously wrong or has been mis-stated, you can cancel the contract - it's that simple. So often we've seen buyers who've been overly cautious and hesitant miss out on their perfect business because someone else came along, saw the potential and snapped it up!