David C Barnett Small Business and Deal Making M&A SMB
7 Costly Mistakes When Buying a Business
Apr 23, 2025
Discover the seven costly mistakes buyers often make when acquiring a business. Learn why due diligence is crucial and why conventional online advice might mislead you. Delve into the importance of quality of earnings reports, especially for small businesses, and how they can shape your buying strategy. The discussion emphasizes the need for meticulous planning, emotional control, and tailored research to avoid pitfalls. Gain insights on preparations you should make, including understanding products and valuable resources to streamline your acquisition process.
32:18
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Quick takeaways
- Thorough due diligence is essential for buyers to understand business operations beyond formal reports, especially for smaller businesses.
- Emotional attachment and hype can lead to overpaying for a business, underscoring the importance of basing decisions on realistic metrics.
Deep dives
The Importance of Due Diligence
Skipping proper due diligence is a critical mistake many buyers make when purchasing a business. Often, newcomers assume that a quality of earnings report is mandatory, but such extensive reports may not be necessary for smaller, main street businesses. Instead, buyers should familiarize themselves with the specific details of the business they intend to purchase and be proactive in their examination. Engaging in the due diligence process personally can provide valuable insights and knowledge about the business operations that formal reports may overlook.
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