I’ve made my decision don’t confuse me with the facts..

30/01/2009 by info.

Both Richard Branson and Warren Buffett have said that their gut reaction to a whether they should be buying a business is more important to them than carrying out months of due diligence. In fact Buffett has been quoted as saying “The deal should be so obvious to you. If you have to carry the calculation out to five decimal places, like pi, it can’t be a good deal”.

Perhaps its easy for Buffett a multi billionaire to make such statements. Maybe he might feel differently if he was investing everything he had into one project.

But it does follow the pattern I often notice that the larger the business and the larger the asking price often the easier the sale. The reason is that these buyers are used to dealing with such large figures and because they have make decisions involving larger amounts of money before and made profits they have confidence in their decision.

Buffett and Branson made their money by taking decisions - you never make money by saying no to an opportunity.

Often the most difficult size of business to sell is the one marketed for £5,000 - £10,000 as the person who is interested in buying that business might be investing all of his money and this is the only decision involving £10,000 that they have ever made.

These buyers often ask for more and more information, looking for the skeleton in the cupboard that isn’t there, and scare themselves out of buying the business.

Now I’m not suggesting that a buyer should carry out due diligence Buffett style but perhaps the most important question you should use in any decision you make in life is does this feel right? What is your gut reaction?

As research undertaken but the University of Texas shows that your gut reaction knows a lie when you hear one.

So maybe Buffett is right after all, make a quick decision and stand by it.

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