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When Seemingly Smart Buyers Make Fatally Not So Smart Decisions!

Buying A Business StrategiesI once closed a deal where the seller was like any other seller, wearing 6 hats at once and doing his best to survive. For any of us who have owned our own businesses that had employees, rent to pay, fussy clients to appease, books to deal with, accounts to balance, checks to write, suppliers to pay, etc, you get the picture. We learn early on that rocking the boat means having to deal with the ramifications. I'm not saying that sometimes it isn't necessary but not on the first day you take over a business.

If you are buying a business, you probably have really good ideas about changes you would like to implement and ideas to sell more, be more efficient and more organized. All great, except that I caution you to be careful about the toes you are stepping on today they will be attached to the feet that will walk out on you tomorrow.

This is exactly what happened to my buyers. On the first day they took over they were so critical of the previous owner and the way the business was set up and being run, they managed to offend almost everyone in the business on the first day. As a new owner of an existing business your primary job on day one is to observe and silently note the changes you would like to see over a reasonable period of time.

In this case, the buyer thought she was criticize the seller but in fact it was a key employee that had organized much of the front office and this employee is critical in the success of this business and well known in the industry for being very good in her field. If you take over a business and you aren't happy with one or some of the employees, please exercise some common sense! You will need to fully understand the business you just took over and find a suitable replacement, this takes time!

These buyers displayed intelligence throughout the deal but something went very wrong when they took over and they felt that they had to show everyone "who's boss". They insulted the manager who is an excellent sales person and drives most of the business, decided to change the contract of another key person who now doesn't want to be associated with them and reduced the pay of another skilled key employee who performs one of the most popular services.

The bottom line is it's very easy to criticize people from an ivory tower but until you walk a few miles in their shoes I suggest you keep your attitude friendly, your ears open and your mouth closed until your ready to deal with the ramifications.

Christina Lazuric, CBIAbout The Author:  Christina Lazuric is an Orange County Business Broker who shares her broker experiences with BizBen readers and has had varied direct small business experience in the past but now assists small business owners sell their business and offers business buyers find their dream business to operate. Phone Christina direct at 949-257-7823.


Categories: BizBen Blog Contributor, Buying A Business, How To Buy A Business



  Helpful Resources To Assist In Selling And Buying California Businesses

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Helen Yoo: Escrow & Bulk Sale Services - Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 800-864-0420.

Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.

Jaime Ortega: Cannabis Industry Consulting & Due Diligence

We offer Cannabis Industry Consulting & Due Diligence Services to business buyers, owners, sellers, entrepreneurs throughout CA. We offer assistance with: licensing issues, cultivation facilities, products/ services, dispensaries, corporate strategy, & project management. Call 866-591-7802 for info.

Joanne Weber, Broker - Preschool Specialist - Southern California

The Ryan Craig Company is in its 35th year as the recognized expert in Southern California, dealing exclusively in the sale of preschools, Montessori schools, day care centers, and private schools. Our extensive list of references speaks for itself. Phone Joanne at 818-760-3684 for more info.

Jack Oh, Business Broker - LA, Orange Counties

Business broker and real estate services in the Los Angeles and Orange County areas. 10 years experience with great negotiating skills. To sell a business or buy a business in the LA or Orange County Areas phone Jack and his team at 562-787-4989.

Elizabeth McGovern: Escrow Services - SF Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews

FREE Workshop 9/9: Due-Diligence When Buying And Selling A Business

This workshop is about the due diligence process of buying & selling a business. Saturday 9/9, 9AM to 1PM (refreshments will be served) located in Seal Beach. Phone Willard Michlin (CPA, Certified Fraud Examiner, Due Diligence Expert, Business Broker) for more info at 800-864-0420 & to RSVP.

Deposits With Business Purchase Agreements: How Much? Structure? Refundable?

Purchase agreements when buying or selling a small business can be tricky. A top Southern CA Business Broker discusses this topic including multiple strategies regarding deposits with business purchase agreements. Lee Petsas (Orange County Business Broker) at 714-363-044 contributes this blog post

Workshop 9/9: How to Find Profitable Businesses For Sale Not On The Market

Workshop: Find Businesses Possible For Sale Not On The Market - Seal Beach Location. Date: Saturday 9/9: 1:30 PM to 5:30 PM. Call 800-864-0420 for more information or to register. Willard Michlin, CPA will be presenting this workshop.

Purchase A Business With Limited Or No Cash - Financing Tips For Buyers

Purchasing a business with no money down can be difficult, but not impossible. Financing a business purchase or down payment can often be accomplished with these strategies from Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor with BizBen) at 866-270-6278.

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Video/Podcast: Business Purchase Financing Chat: SBA Loan, Non SBA Financing

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