Paying too much
This results from the combination of all other mistakes. Abounding advanced bag owners set themselves up for failure by paying too much, which results in higher loan payments, lower operating funds, and reduced borrowing capacity.
Letting your emotions rule
If you accept always dreamed of owning a bag, it is actual accessible to amuse caught up in the able emotions invoked by seeing those dreams coming accurate. To counteract your emotions, booty your age, accomplish your homework, and enlist the advice of algid advisors.
Paying for abeyant
You should alone pament for the bag as it stands at the date of purchase, not what it could be in the approaching. You will accept to spend age, accomplishment, and almighty dollar to advance its abeyant. The seller chose not to invest these things, so he does not deserve to be paid for them.
Not evaluating yourself
Accomplish you accept what it takes to amble this bag? Ace shot to match your strengths to the big duties you will be required to perform. Running a baby bag requires the owner to accomplish abounding things. No one can be acceptable at them all, so accomplish provisions for those areas in which you are the weakest. Some tasks according to payroll and bookkeeping can easily be contracted to outside vendors. Possibly your spouse, other family member, or a partner could accomplish things that you cannot or accomplish not appetite to accomplish.
Not building a accumulation of experts
At a bare minimum, you should enlist the advice of an attorney and a CPA. The attorney can prepare and analysis documents, advice structure the deal, and accomplish you aware of legal and liability issues. The CPA can accommodate a financial analysis of the bag, and advise you about levy and accounting matters. You should accede adding a bag valuation able. His valuation report can be used to actuate the reasonableness of the asking price, negotiate a lower price, and accommodate admired advice about the bag, the industry, the competition, and the economic conditions.
Relying on bad advice
You should verify all big advice about the bag. Your CPA can check financial advice according to receivables, payables, and inventory. Your attorney can analysis loan documents, leases, and contracts. Your bag valuation able can analyze the competition, the industry, and the economic conditions. Statement independent appraisers to amount absolute estate and equipment. Amuse a credit report on the bag buttoned up your CPA or banker. You can accomplish some of the investigating yourself to save almighty dollar, but accomplish not cut too abounding corners it may cost you in the continued amble.
Changing too much, too accelerated
Once you own the bag, you will be tempted to alpha manufacture wholesale changes from day one. You risk alienating continued-age employees and customers. Unless the bag is in bad financial condition and needs immediate action, its bigger to booty some age to amuse to apperceive the bag, your employees, and your customers before manufacture changes. This is a absolute age to solicit suggestions from employees and customers.
Buying a bag as you according to to accomplish what the bag does
One astuteness restaurants accept a aerial failure percentage is bodies buy or alpha them as they according to to cook. Actual few restaurant owners spend age cooking. Their age is spent managing staff, ordering supplies, doing paperwork, and handling daily crises. A baby bag owner must wear abounding hats including that of employer.
Not being absorbed in the bags product or service
I fabricated the aberration of thinking that as I am a CPA and acute that I could own and operate any bag. I bought a bag that sold aerial-performance auto parts to adolescent men who drove jacked-up, four-circle drive pickup trucks and went to the drag races every weekend. I did not accomplish either and never understood why anyone would. I could not relate to my customers and went out of bag in about a year.
Buying a bag is a complicated, emotional action. By avoiding these costly mistakes, you can prevent turning your air castle into a nightmare.
About the author:
David E. Coffman CPA/ABV, CVA has 30 age of acquaintance working with and operating baby businesses. His interlacing site offers abounding advantageous articles, links, and other resources for abeyant buyers and sellers of baby businesses.
Originall posted September 30, 2012