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3 mistakes you don't want to make when buying a business

Small businesses come up for sale all the time -- and they can be attractive to people who have an entrepreneur's spirit but don't necessarily want to go through the hassle of starting a business from scratch.

Before you bite on that attractive offer, however, make sure that you aren't making any of these mistakes:

1. Don't underestimate how hard this is going to be

You have a lot of soul-searching to do -- more so if you happen to be in a committed relationship with anyone else. Owning a business is a big commitment. Are you really ready for it? Do you have your spouse's or partner's full support?

2. Don't expect to keep working your old job

You can't hold onto your old job -- even on a part-time basis -- while you take over a business. You probably aren't even going to be able to do that as it gets closer to the time to buy.

Statistically, it takes someone looking to buy an existing business one or two years to find the right place. On average, you can expect to look at more than 100 possibilities, done preliminary investigations on at least 15 different businesses and made official overtures up to four times before you find a keeper.

At some point, you need to be willing to let go of the security of your old job and trade it for the insecurity that comes with being a business owner. If you can't handle that thought, it isn't time to buy a business yet.

3. Don't underestimate the seller in any way

First, don't assume that a healthy-looking business is actually turning a good profit. You need to dig deep into the financial records to make sure that the seller hasn't manipulated things to make the business look better than it really is.

Second, take time to understand why the seller is selling. Many still love their business and are leaving it behind reluctantly due to health problems or age. You will make a better deal if the seller feels that you will respect what they have built and really love what you're buying.

Once you're fully committed emotionally to a deal to purchase a business, make sure that you get an experienced legal eye to look everything over and help with the details in order to best protect your interests.

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