The Biggest Mistakes Buyers and Sellers of Companies Make

I spend a lot of my time these days helping business owners buy and sell companies. Buyers and sellers are almost always not prepared for the process. For sellers, they are surprised when buyers call “their baby (the company) ugly”. They also many times overvalue what their company is worth.  For buyers, they are surprised that the financial statements are not always accurate or that under due diligence, the seller has “skeletons in their closet”.

On The Small Business Radio Show this week, I talked to Elliott Holland of Guardian Due Diligence who is a Harvard Business School alumni and expert in the small business acquisition space. He helps entrepreneurs do two very important things:  (1) execute great small business acquisitions and (2) kick bad deals out quickly, saving time and money. Elliott provides an audit-like product called a “Quality of Earnings” (QoE) to verify the numbers for the messy and unaudited financials of the typical small business. (Buyers typically do this when acquiring a company.) He also advises clients through the entire business acquisition process from start to finish.

Here is what we talked about in our interview:

  1. Why should every owner run their business like they’ll one day sell it (because they probably will and it takes time to get prepared).
  2. In mergers and acquisitions, what specific value do lawyers, accountants, and brokers bring to that process? What should I expect to pay?
  3. What are the biggest mistakes people make when buying companies (and selling them)? How can you avoid them?
  4. How should owners find buyers for their business? Should they use a business broker or a mergers and acquisition specialist? What are their typical fees?
  5. How can you make the business acquisition process easier for buyers and sellers?

If you are considering buying or selling a company, listen to the entire interview with Elliott.

Image: Elliott Holland

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