BiggerPockets Money Podcast

517: Everything You Need to Know Before You Buy a Business

5 snips
Apr 5, 2024
Thinking of buying a business? Learn how to evaluate its worth, use SBA loans, ask the right questions, and avoid financial pitfalls. Expert advice on due diligence, valuing assets, and success stories. Explore the journey to financial freedom through business ownership.
Ask episode
AI Snips
Chapters
Transcript
Episode notes
INSIGHT

Ideal Buyer Traits Aren't Always Obvious

  • The ideal buyer is often the hungriest, someone with domain expertise, local ties, or sheer luck.
  • Many long-time employees (the owner's #2) shy away from the entrepreneur risk and personal guarantees needed to buy the business.
ADVICE

Do A Quick Onsite 'Tire-Kick' First

  • Before expensive diligence, visit the business and check key-man risk, financial systems, and customer longevity.
  • Spend meaningful time onsite to verify how central the owner is and whether systems/reporting are reliable.
ADVICE

Probe Profitability Tactfully

  • Ask about average profit per job and whether profitability is tracked, but phrase questions conversationally to keep the seller cooperative.
  • Spend half a day or more onsite if you suspect the owner performs many roles.
Get the Snipd Podcast app to discover more snips from this episode
Get the app