Adventures Into the Unknown: This is probably the most common mistake and the most important one to avoid. Sometimes people believe they don't really need to know much about an industry because they will hire experts to manage their business for them. But there is a difference between delegating duties and being derelict in one's duties. If you don't know the industry your business operates in, how will you know if your managers are mishandling it?
Making It Personal: Business incorporation protects individuals, ensuring that the owners' personal assets are not subject to the risks of the business.
Insufficient Investigation: There is more to a business than how much money it makes or how much it is worth, and experts warn that failing to look beyond the financials before making a purchase is a common and extremely costly mistake. A business can appear successful and even run at a profit but be plagued with problems. Explore all areas -- talk to customers, suppliers, colleagues, and even neighbors. Get the whole scoop on your prospective purchase to ensure that you pay what it's really worth. Give the business its due diligence.
Too Taxing: You should be prepared to put your all into a new business and work hard. But do not overextend yourself financially. If you can't buy the business without going into significant debt, it may be a better to wait for another opportunity.
Hazy Agreement: Make sure that when you do sign a contract, it is sufficiently detailed. The agreement should outline when responsibilities transfer from one party to another and specific when you become liable for the business. Make sure you negotiate favorable - or at least fair - terms. Don't let the excitement of new opportunities go to your head or make you reckless. The opportunities bring added responsibilities. Make sure you know what you are getting into at every step.
Hire a Lawyer
If you plan to purchase a business, or even if you are just starting to consider it, talk to a lawyer. Counsel can help guide you in the decision-making process, draft contracts, and ensure that you comply with the law at every step.