John's monthly message to help you do better getting into business, out of your business or improving your business.
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10 Ways to Sabotage a Business Buy-Sell Deal
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The following are in no particular order and are a mixture of traps that affect sellers, buyers or both. Many also carry over to non-transaction business whether it be generating a new customer, making a loan or setting up a strategic partnership.
- Keep asking for more. Nibble away until the deal is dead.
- Don't understand that the bank has the money and therefore the bank makes many of the rules.
- Don't get your attorney, accountant and other advisors involved until it's too late (meaning you've agreed to conditions they would disapprove of).
- Make an offer before talking to lenders.
- Sell after you're burned out and the business is declining.
- Have advisors inexperienced in buy-sell.
- Think a seller with no family and a profitable business has no options and will sell to you for very little cash and a large note. That seller has all the options. They have no family obligations, they have profits and therefore there is high demand for their business.
- Don't involve your family in the decision and then find out your spouse is the real decision maker.
- Have advisors who want to put all the burden and risk on the other party.
- Fail to disclose any red flags until it's too late so that once they are uncovered your loss of trust is irrevocable.
Conclusion
I'm sure many of you reading this have seen other things that have sabotaged deals. Send them to me and I'll publish them, with attribution to you, in a future edition.
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Business Buyer Advocate®
The Escape Artist™; Large Exits for Small Businesses™
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