01 Dec The Biggest Mistakes Buyers and Sellers Make
The biggest mistake buyers make is definitely overpayment. It can be heartbreaking. Just last week I met with a former client we helped sell out. He understood the value of skilled assistance, we worked the proven process and he made a lot of money. He then turned around and vastly overpaid for another business (he didn’t use my firm) and he’s really struggling right now.
Buyers tend to get so excited and want to become an owner so badly they become willing to overpay and accept unfavorable terms. They rationalize around the risk factors and even close out the voices of caution. Alternatively, they should keep in mind that their goal is to make money and succeed financially over the long term … not just “become a business owner.” They should heed the words of native Tulsan and legendary deal man Henry Kravis of KKR when he says, “Any fool can buy a business. Celebrate when you sell it for a profit.”
The biggest mistake sellers make is failure to understand it’s a sales process! To understand that, if done correctly, the process alone can add big dollars to the sale price. Double it. It requires finding LOTS of high-quality buyers and working them all at the same time. To be sure, it’s neither a part time nor “do it yourself” project.