If you are considering buying an existing business, then the information in this article can save you a lot of time, money, and frustration.

Listen to this:

Some time ago I was talking to a guy who knows how to analyze and value businesses.

And he began to tell me why it is a mistake to buy any business that is advertised or listed with a business broker.

“Why is that?” I asked. I had never heard this before. In fact, I’ve always been told that you MUST buy businesses through a broker. And that doing it was the easiest and safest way to do it.

“Because unless the owner is just retiring and wants to get paid, there’s usually a more sinister reason why they’re selling,” he replied.

“What do you mean?”

“Well, would you sell your business right now?”

I thought about that for a moment and it became clear what he meant.

People don’t usually sell good businesses.

I know I wouldn’t sell mine right now…unless it started to stress me out or I did so well that I could “raise money” in the tens of millions of dollars.

Unfortunately, with most businesses for sale, it’s usually not a retirement issue…it’s a stress issue or some other issue.

And if you just look at the numbers, the financial statements and the sales… it will usually become very clear what the “real” reason the owner is selling is, good or bad.

And that was my friend’s point.

If you are going to buy a business you must do two things:

1.) Learn to analyze a business or find someone who does.

2.) Be very skeptical of anything for sale or listed by a broker.

In fact, the best businesses to buy are the ones that are not for sale.

Those in which the owner has not thought of selling… because everything is going well. But who, at the same time, would still be very interested if someone approached you with a letter or a phone call making a lucrative offer.

Keep these simple facts in mind when looking to buy a business and you will save yourself a lot of money, time and hassle.