Sifting through all the incorrect information is important when buying a business There's A Ton Of Incorrect Information About Buying A Business
Sifting through all the incorrect information is important when buying a business

I try to read every article about business buying and selling and specifically in regional markets across the globe.

If one were to believe the contents of each one, you could go crazy. I have read ones that state: Valuations should be done on a certain basis and another article suggests an entirely different approach. One suggests that business sales are up and the next that sales are down; one states banks are financing, and then banks are not lending. There are more buyers, there are less buyers. And on and on the list goes.

The reality is, not much of it matters really and the wealth of information available to prospective business buyers is actually a curse.

Take a few minutes to peruse the Internet about any subject related to buying a business and you will uncover a ton of content, almost always generic in nature, very rarely providing any meaningful or actionable information.

Don't get swayed by macro trends that will never, ever impact the business you are considering. A perfect example is the retail gas station industry. For at least a decade, potential buyers have told me that the alternate fuel industry is a major concern for them in regards to potentially acquiring a gas station and plenty walk away from it because of their fear that we'll ALL be driving electric cars soon. Sure, that sector may, in many years have an impact but certainly not today to any meaningful degree.

My favorite one this year was from an individual looking to buy an insulation business but decided not to because he felt that the global warming phenomenon could change the demand for home insulation in colder climates. Are you kidding me? Yes, it is possible melting ice fields in the Arctic will directly impact home insulation but only if you intend to own the business for the next 2 million years.

Don't drive yourself crazy with data that doesn't pertain to your situation. And certainly, avoid information that's far too granular in nature and not specific to your particular situation. Instead,

focus on engaging sellers and learning absolutely everything you can about their specific business and industry plus whether or not you have the skills to operate it and regarding possible threats,

what are they and how can you overcome them? Understand, but do not dwell on general trends that in no way trickle down to your situation.

The point being:

choose your information wisely. There's a lot of clutter around and far too much generic and useless information. Research and preparation are two critical components to being a successful business buyer and therefore you have to have not just information, but the right information available.

This article represents a fraction of what you’ll learn on this topic in the How To Buy A Good Business At A Great Price© series - the most widely used reference resource and strategy guide for buying a business. To learn more click here

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