Buyer Fever – An Example

We all get it, actually many times. It could be something simple like a gym membership (those 20 pounds will melt off), a bit more involved like a car (I sure look cool in this red car), or even a house (wow, what a kitchen).

When buyer fever hits about a business it can be trouble. I’ve seen my share of buyers with the fever, and it usually comes back to haunt them. Buyers with the fever will pay too much, do incomplete due diligence, or ignore blemishes.

Saw an extreme case recently. The buyer loved, and I mean loved, the service. So he bought the business. Never mind he didn’t have the license to run it, meaning he had to hire someone with that license and was therefore at the mercy of that employee staying. Never mind he grossly overpaid. He got to own the business whose services he was infatuated with.

Love of a product or service is never a good reason to buy a business, which is why it’s called buyer fever. When emotion overtakes logic, it leads to trouble.

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