1. Relying too much on gut feel
Your instincts matter — but they’re not due diligence. It’s easy to get caught up in the excitement of a business that feels right, especially if you’ve always wanted to own a café, a gym, or a trade-based business. But emotional decisions can cloud judgment.
What to do instead:
Back up every feeling with facts. Analyse the financials, understand the market, assess the customer base, and review systems and staffing. Work with a LINK broker to ensure your decision is based on a complete picture — not just a good vibe.
2. Skipping legal and financial advice
Trying to save on professional fees can end up costing you tens of thousands down the line. Business purchase agreements, lease terms, licensing, compliance — these aren’t just boxes to tick, they’re legal safety nets.
What to do instead:
Engage a commercial lawyer and a business-savvy accountant who understand Australian business sales. Their role is to protect you, ask the right questions, and highlight risk. Think of them as your business bodyguards.
3. Underestimating working capital needs
Many buyers focus so much on the purchase price that they forget about the after. Your new business may need a cash buffer to cover wages, supplier payments, rent, and stock until the revenue catches up — especially if there are seasonal trends or outstanding receivables.
What to do instead:
Ask the broker or seller for a realistic picture of the business’s cash flow cycle. Factor in stock purchasing, marketing campaigns, delayed customer payments — all of it. Your accountant can help you model this.
4. Overlooking staff and culture fit
You’re not just buying a business — you’re inheriting people. Staff dynamics, morale, and loyalty can have a massive impact on how well you transition into ownership.
What to do instead:
Ask about staff turnover, key personnel, and any upcoming contract renewals or issues. If possible, spend time observing the team in action. Smooth handovers with key staff can make all the difference post-settlement.
5. Not understanding the industry enough
Whether it’s franchising, manufacturing, or professional services, every industry has quirks and compliance considerations. Jumping in without understanding the playing field can leave you exposed.
What to do instead:
Do your homework. Use your LINK broker to gain insights into how businesses in the sector typically operate. Look into licences, council regulations, supplier agreements and demand trends.
6. Ignoring the seller’s motive
A seller might say they’re retiring or relocating — and often that’s true. But sometimes, declining profits, operational headaches, or future risks are the real drivers.
What to do instead:
Don’t be afraid to dig deeper. Review at least two years of financials and ask about any recent challenges. A good broker will help mediate these conversations with transparency and respect.
7. Rushing the process
Yes, opportunities move quickly — but speed should never come at the expense of certainty. Taking shortcuts can mean you miss red flags or regret the decision later.
What to do instead:
Set a realistic timeline and stick to it. Lean on your professional advisors and broker to keep things moving while ensuring nothing is skipped.
Ready to buy with confidence?
Here at LINK, we believe informed buyers make better business owners. Our brokers are here to guide you through the process, connect you with trusted advisors, and ensure you’ve asked (and answered) all the right questions.
We’re here to help you to not only buy a business, but to pair you with the right business for you.
Get in touch with us here.
