Do Your Due Diligence (Fundamentals of Business #5)
Few things are irreversible until you quit your job or sign a loan. It’s critical to take advantage of the time before these steps to learn as much as you can about the business you are going to start or are about to buy.
You don’t get another chance to learn with the option to back out. The easiest way to stop a crisis is to not get into a crisis situation in the first place.
There are very few people that you will encounter throughout the startup process who will truly be honest with you. Almost everyone you deal with will have a financial upside to you going forward with your deal. Banks make money off originating loans. Brokers make money off closing transactions. Vendors make money off you ordering new equipment. Your seller makes money by getting you to actually buy the business.
There is a collective vested interest in getting you to move forward. This makes it all the more important for you to do your own research into what you’re getting into, because you can’t trust most other people’s analyses. The most valuable person you can find is someone that you can trust to tell you that something you really want to do is a bad idea.
You may find that the bank, broker, or seller will try to make you feel bad for asking questions at some point -- ignore them. If you are bringing your money (as either cash or debt) to the table, you get to decide if you’re actually going to spend it. Once it’s gone, it’s gone, so use that leverage while you have it to find out every detail you have ever wanted to know. People who can’t appreciate this are often bad fellows to do business with.