7 Myths About Buying a Business That Hold You Back

If you are considering buying a business, you have probably encountered some persistent misconceptions that make you hesitant. At viaductus, we have found in numerous conversations with potential business buyers that certain myths repeatedly arise and prevent talented individuals from taking the step toward business acquisition.

In this article, we dispel the seven most common myths and show you why the path to entrepreneurial independence through acquisition is more accessible than you might think.

Myth 1: "You have to have bought several companies already"

One of the most widespread misconceptions is the assumption that successful business buyers must have completed multiple transactions beforehand. The reality is different.

The truth: The vast majority of business buyers are first-time acquirers. Many successful entrepreneurs bought their first company without prior M&A experience. What distinguishes them is not their transaction history but their determination, willingness to learn, and ability to build the right support network.

A study by the Institute for SME Research shows that more than 70% of successful business acquisitions in Germany are conducted by individuals buying a company for the first time.

Instead of transaction experience, you should ask yourself: Do I have what it takes to buy a business? Personal qualities and leadership skills are more decisive than M&A experience.

Myth 2: "You need millions in equity"

This myth particularly deters many potential buyers. The idea that you must have saved a fortune to even consider acquiring a business does not reflect reality.

The truth: For most mid-sized acquisitions, 10-30% equity is sufficient. For a company with a purchase price of €500,000, this means you can enter with €50,000-€150,000 in equity. While still a significant amount, it is far more realistic than millions.

There are even ways to buy a company with almost no equity if the conditions are right. Particularly interesting are:

Seller loans, where the seller finances part of the purchase price
Earn-out agreements, which link parts of the purchase price to future success
Mezzanine capital as a flexible financing option

Our article Financing a business acquisition with little equity offers further creative financing solutions.

Myth 3: "You have to be an expert in the industry"

Many prospects believe they need years of industry experience to successfully acquire a company.

The truth: Leadership experience and willingness to learn are more important than specific industry knowledge. Of course, a basic understanding of the industry is helpful, but it can be acquired. More crucial are:

Leadership skills and the ability to manage a team
Analytical thinking and readiness to quickly familiarize yourself with new topics
Understanding of basic business processes and financial analysis

Especially in Management Buy-Ins (MBI), industry outsiders often initiate positive changes with their fresh perspective and new ideas. They bring new viewpoints that can be valuable in entrenched industries.

Our article Can anyone buy a business? provides further insights on this topic.

Myth 4: "The best companies are never on the market"

A widespread belief is that truly good companies are never publicly for sale but only offered through exclusive networks.

The truth: There are excellent companies on public platforms and in M&A databases. The reasons for selling a business are diverse and often unrelated to the company’s quality:

Succession due to owner’s age without family successors
Personal circumstances of the owners
Strategic realignment of corporate groups

Business exchanges and M&A advisors provide access to many high-quality listings. Our article on Business Exchanges: Advantages and Disadvantages explains more about the various marketplaces.

Additionally, structured approaches like Search Funds help target suitable companies even if they are not actively for sale.

Myth 5: "Due diligence is unaffordable and only for large corporations"

Many potential buyers fear that professional due diligence is only possible with a huge budget.

The truth: Due diligence can be scaled to the size of the company and is affordable even for smaller acquisitions. For mid-sized deals, the cost of basic due diligence typically ranges between 0.5% and 2% of the purchase price.

There are different levels of review:

A basic due diligence covering financial and legal aspects
Extended reviews such as Commercial Due Diligence or Strategic Due Diligence

Our article Due Diligence Costs provides a detailed breakdown of expected expenses.

A thorough review is not a luxury expense but a necessary investment to avoid costly surprises after the purchase. Our Due Diligence Checklists help you prepare and save costs.

Myth 6: "After the purchase, you have to change everything"

A common misconception is that as the new owner, you must immediately overhaul everything to leave your mark.

The truth: Careful development is more successful than radical upheaval. Most successful acquisitions are characterized by a phase of observation and understanding before implementing major changes.

The key to success lies in a well-thought-out integration plan:

The first 100 days should primarily be dedicated to getting to know the business and analyzing it
Cultural integration takes time and sensitivity
Employee management after acquisition is crucial for long-term success

Our article Successfully engaging employees after a business acquisition is particularly helpful.

The best buyers initially respect what works and then gradually introduce their own ideas.

Myth 7: "Buying a business is riskier than starting one from scratch"

Many aspiring founders assume that acquiring an existing business is riskier than starting a new one because they might inherit "hidden problems."

The truth: Statistically, buying an established company is significantly less risky than starting a new business. According to figures from the Institute for SME Research, only about 10% of business acquisitions fail within the first five years, while the failure rate for startups exceeds 50%.

The advantages of acquisition include:

A proven business model with existing customers
Established cash flows from day one
Experienced teams and processes
Known supplier and customer relationships

Our article What are the advantages of buying compared to starting? explains these aspects in detail.

A thorough business valuation and due diligence further minimize acquisition risks.

Conclusion: Buying a business is more accessible than you think

As we have seen, many myths unnecessarily hold back potential business buyers. In reality, the path to entrepreneurial independence through acquisition is achievable for many people — even without millions in the bank or decades of industry experience.

With proper preparation, a solid network of advisors, and a willingness to keep learning, you can successfully make the leap into self-employment through business acquisition.

Would you like to learn more about buying a business? We recommend our Checklist for Buying a Business or the comprehensive guide These 5 Steps for a Successful Business Acquisition.

Or contact us directly — we are happy to help you find your path to entrepreneurship through acquisition.