Why I'll Never Buy Another Business ...

[barbdear]

Hi guys and gals. I just launched my new small business blog with a post about my disasterous attempt to buy an existing business. You can check it out at:

http://www.biz-blogger.com/?p=18

If you stop by, please leave a comment and say hello. I'd love to meet you!

Barb

[kendvp]

Interesting read, I would mention checking the companies financial records before purchasing. That's the most important step if you're going to buy a business IMO. If they don't have any financial records or won't show them to you, then don't buy it.

[Martin123]

Certainly you need to check company’s financial records but you should also go beyond the financial statements. As you also need to understand how sustainable that money is in the future.

[barbdear]

Thanks, guys, I appreciate the comments. In this case, the problem wasn't the financial records (I reviewed 3 years of tax returns and certified accounting statements prior to purchase) ... the problem was having to depend on other people who knew the business better than I did. Won't make that mistake again!

[Biz Optimizer]

I had just the opposite experience - bought a company with NO experience. The owners told me if I added another account I'd have to add truck and driver, etc. Within 6-months, the downward spiral was reversed and the company was performing in bad times better than it had in the previous 9 years. The company is now 10 times bigger with the same truck, same driver, and the gas bill is about the same as it was then - even though gas went up 4X during that period.

The financials and where they lead are the heart - they lead you to understand the business if you follow them. They tell you where the weaknesses are - weaknesses the current owner probably doesn't know as most business owners don't understand financials.

I believe the problem is HOW you don't know:

• Most of us - Don't know - but we can ask.
• The scary ones - (DK squared) Don't know what they don't know - so they never ask.

Those are the ones that run over the clifff and never know why. They could be helped, but are too busy pulling on the inadequate cash supply to think of letting someone show them where they went wrong.

It would be interesting to know how many billions/trillions have been lost by businessowners that had MOST of what they needed, but didn't know how to find that last little piece of the pie. I know I have seen tens of millions go down the tubes myself.