Trouble Shooting Your Business Buying
Being able to trouble shoot a problem is an art that must be developed, though there are those who think they are naturally good at it. There are a very small number of business schools that actually train you in the art of doing this, I only know of one.
Troubleshooting means to find the trouble of some problem or situation. Another way of looking at this is “Why does the problem exist?” “What is the source of the problem?” When you find the basic cause of a problem, it usually can be corrected with a step-by-step plan of attack.
The most interesting thing about trouble shooting business buying is that it is almost impossible to do with problems you are very close to. When you are very close to a problem you are emotionally involved with it. The problem continues despite all your best efforts to solve it. The reason it keeps continuing is because “The problem is never what you think it is. If it were, there would no longer be a problem.” It would have vanished, because if you know the correct source of any problem, you now know what to correct and can do that action. So the thing to remember is that if you think you know the source of a problem, you’re wrong, because the problem still exists.
When purchasing a business, it is important to look for what problem the seller is having that he cannot solve. People sell businesses rarely just to retire. There is almost always some problem they cannot solve. It may be a physical or medical condition, employee problems, legal actions, a profitability issue, or competition cutting your throat. The job of a buyer or his financial consultant is to find out why a seller wants to sell-why does the seller want out, this year, rather than 5 years ago or next year? When you find this motivation, you can then determine the true value of the business. You can also then figure out if the problem is fixable-by you or if you are just buying the seller’s problem.
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