Martha Stewart Place Cards

Introduction:

This article was written as a general discussion on the theme of "Due Diligence". It is for informational purposes and is not intended to be a definitive guide for your particular situation. You should consult the appropriate professional regarding your specific situation or transaction. In addition, this article is by no means defending, suggesting or implying that anyone who engages in fraudulent activity type whatsoever. They are simply the things a buyer should be aware of when doing due diligence purchaser of a business.

You spent months finding the right company. The seller says you can not go by what the tax return, but the company shows a lot of money, and can prove it. Your inspection of the statement of profit and loss shows that sales increased slightly in recent years. The most important and best news of all is the price is right! Is it too good to be true? I'm sorry to say this, it probably is.

I think it Benjamin Franklin who said: "A fool and his money are soon parted." Mr. Franklin must have seen many business buyers. When buying appliances that break in a month It costs you a few dollars. When you go to meet and exchange were wrong because the solid gold watch is really gold plated, it costs you a few hundred dollars. When a used car salesman cheats you, you selling a lemon, where the speedometer has been turned over 100,000 miles, it costs you a few thousand dollars. Getting cheated buying a business can cost you thousands to hundreds of thousands of dollars. The only investment or the purchase that I know where you can be misled about more money in real estate. Real estate fraud is in the hundreds of millions of dollars and done. You would be shocked at all the people between 1875 and 1950 which saw advertisements for real estate in Florida and bought the first of wetlands. What First Louisiana beach front with Alligators living outside your front door? I wrote a series of articles on fraud and it keeps getting bigger.

I hope the point is made. Never buy a business on the word of someone. In fact, you should never buy anything on the word of someone. Confirm everything, believe nothing and understand that you will always find things after the end of the engagement, which will surprise you. A similar example is known by every employer. A staff worked for a company to 4 months and complained to the personnel officer that the work was just too hard. He complained that he needed more training and lower quotas. You feel sorry for him. You talk to him and talk about it. You listen and believe all the excuses he gives you for poor production. Finally he quit, blaming you for something you, this just before you go and leave the fire. Then you began to take over the work to complete its unfinished projects. You are shocked, as you always re, at what he did wrong and what he covered, he did not. This is what happens when you buy a business. You will find all the actions that the seller, not his staff, had stopped doing since the day he decides to sell the company.

Many companies are doing well. Sometimes the owners have personal things going on in their family life. Sometimes they have medical problems. Several times, the company is not doing well and that the seller is frustrated. It is very common for a seller to work hard to build her business, but due to many reasons, it does not produce what the seller wants. He is frustrated and one day he left. This is usually the day when he called the business broker he met and asks the big question. How long does it take to get out of there? In his mind, he left. It has just the days until he p.