For most business buyers, pursuing a viable business to acquire

is a once in a lifetime event. Because of the infrequency and

the complexity of pursuing a business to purchase, buyers

typically risk unnecessary financial resources and waste

valuable time to find their “ideal” acquisition. With a

complete understanding of business purchase process

fundamentals, a business buyer can effectively reduce the odds

of not finding the right company or paying too for one.

As a business buyer you want to use the most cost effective

means available to ultimately position yourself to get first

shot at your most viable business acquisition candidates and

properly qualify the company to maximize your eventual return

on investment.

Business buyers are prone to commit common errors within their

business acquisition process. Most of these errors can be

reduced or completely avoided with proper understanding of

their cause and affect and a proactive focus to eliminate them

within the multi-step process of buying a company. These common

business buyer errors manifest themselves in six key areas.

You Can Choose NOT to Make These Common Mistakes!

Does making these common business buyer mistakes have to apply

to your pursuit of a business? Absolutely not! A comprehensive

understanding of these common acquisition errors will add

noteworthy efficiency to your business pursuits:

1) Buyer Image:

In a business acquisition process, especially in the initial

contact phases, establishing a credible buyer image with the

business seller is paramount to positioning yourself among

other potential business buyers. There essentially are two

different, but related, selling processes going on

simultaneously within these initial meetings between the

business seller and buyer. The business seller wants to sell

the company and the business buyer wants to position himself

first among all buyers in consideration.

2) Buyer Qualifications:

As a business buyer you are essentially applying for the top

job in the seller’s company. The business seller needs to

quickly understand your unique buyer qualifications. Initially

providing the business seller with an effectively formatted

resume that showcases your most applicable leadership and

management education, experiences and skills is an excellent

first step.

3) Buyer Team:

Again, because of the infrequency and challenge of properly

purchasing and eventually managing a business acquisition, the

buyer cannot afford to approach the business seller without a

qualified acquisition team of advisors. Without a professional

group of advisors on your team the business seller will

justifiably be concerned about the effectiveness of your “one

man band” leadership style post acquisition.

4) Buyer Funds:

Providing the business seller with a written summary of your

financial resources is appropriate, however it can be a “double

edged sword”. If you show too much financial capability

sometimes it increases the probability that the seller will not

negotiate on purchase price, down payment level or seller

financing. If you do not show enough financial wherewithal you

can unknowingly disqualify yourself from further evaluating the

company for purchase.

5) Buyer Criteria:

Without effectively identifying all your critical company

purchase attributes early in the acquisition process a business

buyer quickly finds himself looking at inappropriate

opportunities, dramatically increasing his investment risks and

effectively reducing his creditability with the business

seller.

6) Buyer Methodology:

If a business buyer does not have a well thought out business

acquisition process defined and documented, a faulty business

search program will result in lost opportunities, unnecessary

expenditures and many “false starts”. Disqualifying acquisition

candidates is truly an iterative and evolving process, unique

to each purchase opportunity. The more you can standardize the

acquisition process the better results you will achieve.

Quality acquisition candidates typically represent situations

where the business buyer must do what they must to not only

keep themselves in purchase contention with the business

seller, but ultimately to position themselves as the preferred

business buyer. This takes preparation and a concerted effort

on the part of the business buyer to show the businesses seller

that you are obviously prepared, disciplined in your evaluation

process, well advised and extraordinarily qualified.

The penalties for NOT documenting your management

qualifications, your financial resources and exhibiting your

advisors, purchase criteria and search methodologies to the

business seller can be obvious, but sometimes not. As a

business buyer you must continuously ask for feedback from the

business seller in these fundamental areas. Seller perceptions

of you cannot be assumed and they certainly cannot be assumed

that they will remain consistent throughout a lengthy purchase

due diligence process.

Similar to meeting any noteworthy business challenge, whatever

you can do to educate and focus yourself on eliminating common

business purchase errors in advance and during the mutual

business buyer/ seller evaluation process, the more effective

you will be in ultimately finding a business to buy that was

meant to be yours.

About the Author:

Mark Smock is President of www.business-buyer-directory.com, the

FIRST international business buyer directory of its kind.

proactive business buyers to locate businesses for sale

worldwide that meet their exact registered purchase criteria.