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Industry Statistics Every Buyer Should Know
The industry of business-buying has some very interesting, yet dismal, statistics. When I have mentioned these numbers to people outside this industry, they are stunned.
Why is it so important for you to know this? Let's look at each one individually:
Why 90% Never Buy
Interestingly enough, a recent poll indicated that 50% of all Americans dream of owning a business. One would think that, with such high numbers, far more people would be successful. After all, a 90% failure rate is abysmal. There are several factors why this happens.
In summary, to avoid being a 90%er:
Why 80% Of All Listings Don't Sell
There are too many listings. The Internet is swamped with business-for-sale listings. There are hundreds of thousands available. Listed businesses do not always provide comprehensive information. A savvy buyer knows that they have to dig in and extract the information. You have to know what questions to ask, what to look for, and how to determine if what is being represented is true.
Many businesses are overpriced. The sellers have no logical reason for their asking price outside of deciding that they want x amount. That may be fine for them, but that's no way to package a business for sale. There are additional unrealistic expectations by the sellers which cause only one in five to sell: they want all-cash sales, they do not provide adequate books and records, the business may be in decline, and, quite often, they do not disclose enough information for someone to make a logical decision.
Many businesses have problems. You need to learn everything about the business before you buy it. When sellers misrepresent facts, or do not disclose all of the issues when/if they arise, buyers become leery of continuing the negotiations. Again, it comes down to knowledge and trust. When the buyer wants to buy, and the seller wants to sell, and the parties trust each other; then every challenge can be overcome.
Why 50% of the Deals Falls Through
There are many reasons why this happens including misrepresentation of the numbers, cold feet by the buyer, sellers remorse, inability to arrange financing. While they may all be valid reasons on there own, one has to seriously question the staggering 50% statistic. As a buyer, you will need to understand that deals will fall apart. Do you best to move them forward, but if they collapse, then dust yourself off and move on to the next opportunity.
Your Next Steps
Buying a business is something that anyone can achieve. Don't let this become a looking process. Put yourself in a position to buy. Above all, educate yourself. You cannot guess your way to success! With the right information and advice, you'll make all the right decisions. Don't allow yourself to become a 90%er!About the Author
Richard Parker is President of Diomo Corporation - The Business Buyer Resource Center ™ (www.diomo.com ) and Diomo Solutions, LLC (www.diomosolutions.com) He is the author of How To Buy A Good Business At A Great Price© a 600 plus page how to strategy guide geared for anyone thinking about buying a business. His materials are used by prospective business buyers in over 50 countries. Mr. Parker's articles, syndicated columns and other "how to" guides have been published extensively online and in various print media He is also one of the most successful business brokers in The United States, assisting both buyers and sellers. Mr. Parker has personally purchased ten small businesses since 1990. Email your comments to Richard or visit his website
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|Disclaimer: Only A Small Number Of Businesses Listed For Sale, Ever Sell & Richard Parker related small business articles and small business information provided on this web site is not to be construed as business advice from the website Small Biz Articles.com - or from the corresponding author who posted this article on our website. Richard Parker articles on our website were submitted by various small business owners, entrepreneurs, authors, business experts, accountants, lawyers and other business professionals, but we do not verify the authenticity and the accuracy of information submitted and we are not responsible for any errors or inaccuracies. Please consult with one of the small business administration or small business development officers in your local SBA-SBDC centers, or with an attorney, accountant, a small business expert/advisor, to obtain proper business advice and accurate information for answers related to any specific questions you may have with regards to your small business issues.|
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