6 Common Mistakes When Buying A Business
By Sebastian Amieva
Buying businesses for a living has the drawback that it isn't quite as romantic as you may imagine. Anybody who has really done it will be more than happy to tell you that it can be difficult to get started and to get through the preparation period to the point when you eventually start to make some real money. Most individuals don't realise how difficult and complicated it can be.
Lack of a POF: If you don't have a sort of POF (proof of funds) you are limiting yourself and many brokers/sellers will request that to qualify you as a buyer.
Not setting up an Acquisition Criteria: Which industries, Location, Asking Price you looking for ?
Not thinking about an Acquisition Strategy: Are you going to do MBOs, LBOs. Reverse Mergers, IPOs, Single Acquisitions, RollUps. In Public or Private markets?
Lack of Lead Generation System to find off market deals.
Lack of Lead Generation System to find co-investors.
Lenders network: Not having a solid and reliable lenders network prior deal hunting can be a big mistake.
After spending eight (8) years mentoring individuals as in business acquisitions, I came to the conclusion that the majority of them lacked these crucial components and began making acquisitions without being fully prepared. This is WHY I fully prepare and equip them before deal hunting time.
I hope this list of common mistakes is useful to you so you can truly avoid them.
If you liked it, please like, share and comment!
Sebastian Amieva
PS Connect with me on Linkedin HERE if you're serious about getting into M&A and start buying businesses for a living.
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