Buyers of businesses are generally a cautious breed of human being. They are sceptical, suspicious and nervous of making the wrong decision. This is understandable especially if the buyer is a ‘first timer’. They need constant reassurance they they are not buying a ‘dud’ business, and they always seek professional advice, usually from Accountants’. This is good business sense but the most appropriate time to delve into all aspects of the business is once a contract has been signed, and with a proviso that the contract is subject to a satisfactory ‘due diligence’ period. So many buyers put the ‘cart before the horse’ and engage an Accountant to check into businesses before a contract has been agreed to. This often leads to disappointment for the buyer because the Accountants’ don’t rush anything, especially checking the financials for a business. It all takes time and while the buyers’ Accountant is checking the financials, another more astute buyer sees the opportunity of a good business and immediately signs a conditional contract. The business is now ‘off the market’ until the contract goes through the due diligence phase. The first buyer who procrastinated is now furious, because he’s spent several thousand dollars paying an Accountant to check out a business that he’s never going to own. Well, sorry but it serves him right! An astute buyer, who has an instinct for a good business knows that if you procrastinate and wait until you’re fully satisfied with the due diligence before signing a contract they miss out. And this happens again and again in the daily buying and selling of businesses. Accountants on the Sunshine Coast love business buyers, especially ‘first timers’, because they know buyers often start talking to them long before they need to and cop a fat fee from the Accountant, even if they miss out on the business. Business brokers always advise a buyer to speak to their Accountant before buying a business, but when the time is right, and the right time is after all terms and conditions are agreed on a contract, not before. In the standard conditions to purchase a business in Queensland, there is a very comprehensive ‘due diligence’ clause that is basically an ‘escape clause’ for a buyer to terminate a contract if for any reason they are dissatisfied with the financials of the business, the key word here is ‘satisfied’. Many a contract to buy a business has been terminated because the buyer hasn’t been ‘satisfied’. The legal definition of satisfied can be very broad and basically says that the buyer has to dispel any doubt, so when a buyer ascertains that he’s not satisfied, the contract comes to an end. Smart buyers move on a business fast, buyers who are over cautious miss out. Sad, but true.