What Does Ken Hendricks Look for When Buying a Business?

http://www.inc.com/magazine/20061201/entrepreneur-business.html


Personally, I wouldn't consider buying a business unless I could find at least 3 things I could specifically do to it to make run better.

And from my experience, Ken is right on about sellers being liars.  As one business broker I met with recently told me: "there's just two rules to remember when buying or selling a business.  1) Sellers are liars.  2) Buyers are liars too."  

I believe what he meant when he said that is that 1) Sellers try to paint the best possible picture as to why the business they're looking to sell is viable -- who wouldn't?  But a lot of times they're just not being truthful about their reasons for wanting to sell.  

It's estimated, again per a business broker I met with that about 80% of businesses are needing to be sold not for financial reasons (i.e. the business or industry is falling apart) but for personal reasons (the business owner is burnt out, has a pending divorce, or a sickness, etc.).  

Buyers are just as guilty.  A lot of would-be buyers are putting offers in that 1) they simply can't afford with their current resources alone, or 2) they're not really intent on buying and owning the business they're looking at (that's to say, they're spies, time wasters, or speculators, or a combination of all 3).