Buying A Business - How You Can Avoid One Of The Biggest Business Buying Mistakes

First time business buyers are often notorious for letting the emotion of buying a business cloud their judgement and skip the all important risk assessments and due diligence..

....but there are major pitfalls and commond mistake which can have devastating consequences. The good news is, they can be avoided.

Firstly, consider this question:

How do you know if you are truly suited to running your own business?

Most of us at some stage have longed to leave the confines of the 9am to 5pm job and pursue one of our passions to make a living out of the thing that we love to do most, be it a love for:

- Cooking
- Writing
- Interior Designing
- Teaching
- or just following your current line of work

However, let’s be frank, some people are better suited to employment than self-employment and don’t have the skills, knowledge or personality to run a small business.

Have you ever noticed some businesses seem to change owners frequently?

Throughout the years of business broking I have seen many Restaurants and Cafes change hands often to first time business buyers who are following their passion for cooking.

They are so excited, with huge future plans, new menus and a tone of enthusiasm. After all, their family and friends love everything they cook.

Yet 6 months later their business is for sale, so what happens?

The simple answer is not everyone is successful or well suited to self-employment as they possibly lack the appropriate skills for business or they have purchased the wrong business.

Cooking for paying customers is very different to cooking a meal for friends or family at home. Your friends and family are biased and are not a true indication of your actual culinary skills.

If you fancy yourself as a bit of a cook and have visions of your self as master chef and it’s your first business, it may be best to look at gaining some industry experience first or at least buy a business that is not going to require a demanding menu only achieved by a full a la carte chef.

However, there are both advantages and disadvantages to self-employment and it’s up to business buyers to educate themselves to ensure they get the best outcome.