When we think about going on a holiday, we do lots of research – we spend loads of time musing over those all important questions:
Where am I going to go? When shall I go? What will the weather be like? What type of accommodation shall I choose? How much can I afford to spend? Am I getting the best deal for flights and hotel?
The reason we spend so much time on this is because our resources – cash and time are finite and we want to get the best possible deal and maximum enjoyment out of the time we have. The same applies to buying a car or a house.
This is known as ‘due diligence’ and we carry out due diligence of sorts on a daily basis. Depending on what we are looking at acquiring, it can often take months before we make a decision. It’s this process of evaluation that helps to minimise the risk of things going wrong.
Buying a business is no different. It requires a great deal of planning, consideration and strategy.
Strategies to mitigate risk when buying a business include:
Ultimately, you will go on a holiday and if it wasn’t great, you’ll soon forget about it, replace the cash you spent on the ‘awful holiday’ and look forward to the next ‘great holiday’. And after time you’ll probably have some amusing ‘holidays from hell’ stories to dine out on.
But making the wrong decision when you buy a business can have serious, long term consequences. Before buying a business, it’s essential you do all the due diligence necessary and have the right advisers to help you with the process. Business owners tell us they valued having access to specialist and knowledgeable expertise to help guide them through this significant investment.
If you’re looking at buying a business and would like to talk through what you need to think about, please contact me.