The Hidden Dangers of Acquiring Failing Businesses
Peter Nola
I Sell Businesses. I Show Business Owners a Stress-Free Way to Get the Best Price When Exiting Their Business.
I had a call from a buyer who asked if I had any businesses for sale that were failing.? Any that were in distress and the owner desperately wanted out.
The idea of acquiring a company at a reduced price, then turning it around to make a profit, is not new. However, this approach is often fraught with misconceptions and hidden pitfalls that can turn an attractive opportunity into a financial nightmare.
?Many buyers are drawn to failing businesses for the low purchase price. At face value, buying a business that is struggling financially appears to be a cost-effective way to enter or expand within a market. ?Buyers will believe they can implement changes to quickly turn the business around, achieving a substantial return on investment.
There is also a sense of challenge and prestige in reviving a failing company, which can be a powerful motivator.?
However, this approach is fraught with risks. Failing businesses come with numerous problems, many of which are deeply ingrained and difficult to resolve.
Is there a better option?
To find out watch this video: https://www.youtube.com/watch?v=awoSzkT4Fvg or click on the picture below.
I'll see you over there.
For decades: Helping people find and buy the right businesses the right ways. Avoid dumb deal. Make good deal. Everybody happy. OH YEAH! (I'm not a broker.)
3 个月Oh so much reality from one of the best dealmakers, Peter Nola. More reality is it's hard enough to handle the transition of successful companies and keep them successful, as anybody who's bought a business will attest to. An example this week is someone who bought a business a couple of years ago shut down a while back; it had 80 employees; it doubled its profit since purchased. But because of avoidable situations, that the searcher/buyer apparently wasn't aware of, he lost everything, including his home and life savings. (I not a business broker; never have been. The smartest searchers go a long way faster when business brokers have prepared sellers for dealmaking.