Oh hey guys, it’s Dave Barnett from DavidCBarnett.com.
I wanted to take just a few moments here today to tell you an absolutely terrifying story
about a couple who were trying to buy a business and it coincided perfectly with the fact that
this video will be coming out on April 1st which is April’s Fool Day, for some other
reason.
I was referred a couple who were trying to buy a business by someone in the audience
actually.
So this couple have found a business that was for sale and they wanted help analyzing
the business to see if it was a good deal or as if there was price real.
They asked amongst others where could they find such answers and one of you out there
referred them to me.
Thank you.
I looked at the business with them, showed them why the business is worth about a quarter
of the asking price.
That’s right.
The seller was asking four times more than the business was worth.
And they quickly decided that this wasn’t for them and weren’t even going to try to
negotiate a price to it because the seller was unreasonable.
Now, I thought that was the end of the story but I recently been speaking to them and have
discovered that before they met with me, they had actually paid a fee to the seller in order
to get the financial statement.
So this is often referred to as ‘’Pay to Peek’’ and basically the way that it
works is a person who has a business to sells is approached, the buyer says ‘’I want
to buy your business’’.
They want my information, it is confidential.
I want you to put non-refundable money upfront to show me that you are serious before I show
you my financial statements.
So this is kind of like a real estate agent saying ‘’Hey you might like to buy this
house, but if you want to look inside you have to pay me a hundred dollars’’ and
it is absolutely insane.
No one should ever do this.
But this couple did not know that.
In fact they went right to their lawyer and they asked their lawyer if this was a real
legit and normal thing to do.
And their lawyer said that it was.
And their lawyer said that they need a proper NDA and they needed a proper document that
would support that this money was actually a deposit toward an eventual purchase for
which they did the paper work and they charged them a fee as well.
So when I heard this story I quickly searched the Internet and I discovered that their lawyer
is actually a very well known lawyer in the field of immigration and real estate.
Not in the field of business or business brokerage or helping people buy businesses.
So here’s the thing, I saw a really great quote the other day.
It had been about real estate investing but it applies just as equally to buying a business
and I believe the quote was something like ‘’ In real estate investing you’re going
to pay for your education one way or another.
You either pay for someone to teach you how to do it or you pay through costly mistakes.
And in this case, this couple literally paid thousands of dollars to learn that you should
never give money or a non-refundable deposit before you’re allowed to look at the financials
of the business.
Now, if instead of going you know, spending that money they had done my course Business
Buyer Advantage they would have learned about 500 things that you need to know to buy a
business.
One of which is how to hire the proper professionals to help you.
also they would have learned that their lawyer was not a lawyer to help them in these circumstances.
That’s number one.
And number two they would have learned not to give someone a non-refundable deposit before
you get the chance to look at the business financials.
I mean looking at a business is basically looking at financials, because that’s what
a business is.
It is an economic engine with sales and expenses and hopefully profit at the end.
Without seeing that you’re not able to examine the business.
You can’t just go and look at the four walls and say that this business is something you
want to buy.
So April First is a big day because my new Business Buyer Advantage is going to come,
website goes live that walks people through the gthree steps of the buyer program.
It is also the day that my 21 Stupid Things That People do When Trying To Buy a Business,
special report is live and available for sale.
You can get that from Amazon or from my website DavidCBarnett.com.
As well, I’ve got 3 things that have been realised today April First for people trying
to sell a business have gone live and I will talk to you about that more in next week video.
But if you want to take a peek and look ahead you can always check out the website DavidCBarnett.com.
Thanks and we’ll see you next time.
Don’t forget to subscribe as well if you want to help other people avoid these terrible
mistakes, like this one couple made, please like and share the video because when you
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making these awful mistakes.
Thanks, for real this time.
We’ll see you later, bye.
You made it to the end of the video, that’s great!
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