Fred Wood of Cornerstone Business Advisors Talks Buying Trends

by Arkansas Business Staff  on Monday, Jan. 21, 2013 12:00 am  

Fred Wood

What are common mistakes business buyers make?

Quite often buyers will underestimate the amount of working capital needed for the first six to 12 months of new ownership. They try to buy a company with minimum capital and rely too much on borrowed money. In addition to leaving little margin for error, that approach can severely hamper the company’s ability to grow. The other common mistake is failing to perform adequate due diligence and then being surprised by some aspect of their new business.

What’s your role in the transaction?

We perform two roles: Exit planner, helping owners prepare for a sale or transfer, and broker, managing the sales process for the seller to maximize value in a way that allows him to continue to manage and grow the business while the company is being confidentially marketed and sold.

What about buyer’s remorse and seller’s remorse?

Sometimes sellers have remorse if they have not adequately planned what their post-business life will be. Buyer’s remorse usually occurs when he or she didn’t plan beyond the actual buy/sell transaction and the “dream” of owning his own business. The proverbial dog has caught the car; what is he going to do now? 

 

 

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