30% of all business buyers have been through the process before and therefore have learned, through experience, what they should do and not do. They graduated from the very expensive but enlightening "School Of Hard Knocks." I myself learned how to become a business broker, hard money loan broker, real estate speculator, builder, and land developer by going to this school. I must tell you, that the tuition is more expensive than Harvard Medical School or any other top notch University in the world. Being sixty-one years old it is sometimes very enlightening to reflect on ones life, in retrospect, and see what was done right and wrong.
This exercise is often called the "What if?" It is sometimes productive and sometimes demoralizing. We all have made mistakes and the only person who hasn’t is the person who never takes a chance. While doing this introspection, one big repetitive action repeated multiple times is my reason for repeatedly going back to the "School of Hard Knocks."
One of the reasons I joined professional associations was to have contact with people who knew things about my industry that I didn’t. They became my associates, from whom I could call and ask questions. Occasionally I met an old timer who really knew the ropes. When it was possible, I went out of my way to build a relationship. I wanted him to be a "mentor" to me.
Not everyone who is an “old timer” and has experience can mentor others. When I was a member of the Building Industry Association I met one of the top ten industrial general contractors in the USA. His advice to me was to just jump in and do it. I kept asking him, How? He could not understand my questions, so he stopped spending time talking with me. A real mentor would have helped me outline the plan step-by-step. He would have helped me overcome the obstacles that inevitably occur, because an experienced person usually has the solution.
At the beginning of this article I stated that 30% of all business buyers have been through the process before. That would naturally lead to the conclusion that 70% of all business buyers have never bought a business before. The 70% knowing that they do not know anything about buying a business usually look for some family member, or family friend, who has experience, to help them. Some of these inexperienced buyers understand that they need a team to help. They look for an attorney to help them develop or write the contract and form the legal entity. They find an accountant who will review and audit the seller’s records. They may even look for a business appraiser to tell them what the business is actually worth, in order to make sure that they do not over pay for the purchase. The one thing that many buyers realize but cannot find is a business-buying mentor. This is someone to educate them through the process and tell them about the pitfalls of locating and purchasing a business.
The attorneys and accountants have specific functions that come into play only after you are 100% sure you are intending to buy a business because you must be ready to pay for these services. But what about before you reach that point? What about when you are asked to make an offer even before the financial information has turned over to you to have an advisor study? What do you do then? These are hard questions for even a seasoned buyer to answer, and impossible for a novice. What is needed is a mentor to help guide the way. The word mentor is defined--in a business setting: as the act or process of helping someone younger or less experienced to learn the ropes.
When buying a business today, one needs to be educated in the whole process. Each prospect that examined and evaluated can and should increase the knowledge and understanding of the buyer. Only in this way, can a buyer truly know a good business deal when he finds it.
By mentoring buyers instead of just offering only due diligence, I have found that when you lose a client, after you educate them, you may still had a lifelong friend.
About The Author: Serving all of California, Willard Michlin, CPA offers business buyers Due Diligence Services (Second Opinion, Offer Assistance, Final Due Diligence) when they are thinking of making an offer on a business or in the process of investigating a business purchase. Mr. Michlin has written numerous articles on the due diligence process and can be reached direct at 805-428-2063 for more information and an appointment.
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JRG Communications is a marketing communications company assisting business brokers & agents. Services include: social media management, custom website creation & design, content creation services, optimizing and posting listings on business-for-sale websites, custom articles & blog post creation.
|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 805-428-2063.
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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.
|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.
|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.
|William Park, Business Broker - Southern California
Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.
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For over 25 years I have provided niche business purchase financial advisory and loan placement services with SBA and Non-SBA Loans, Retirement Plan Conversions, Private Investors, etc. Financing amounts available: $20K to $7MM. Call today to get pre-qualified or receive financing: 866-270-6278.
|Larry Larsen, Broker, Laundry Specialist - Orange, LA Counties
Larry Larsen, Realtor has over thirty years of experience in the sales, ownership, management, and construction of coin laundries. He is a licensed broker active in the sale of coin laundries, a licensed insurance agent specializing in coin laundry insurance. Phone Larry at 714-630-9274.
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