Hidden Costs and What Sellers Often 'Forget' to Mention

Let's face it: when you're selling a car, you polish the wheels and forget to mention the dodgy clutch. Selling a business? Same idea—just with more spreadsheets and fewer air fresheners.

This article is your guide to the costs sellers often "accidentally overlook", and how to spot the landmines before you step on them.

🕳️ The Usual Suspects – Hidden Cost Edition

1. Deferred Liabilities

Ever hear, "We're just waiting to pay that next tax bill"? Translation: you might be paying it.

🔎 Look for:

• Unpaid VAT or payroll taxes
• Under-accrued holiday pay or bonuses
• Loans from directors that magically reappear post-sale

2. Worn-Out Equipment

That gleaming espresso machine? 12 years old, held together with duct tape and blind hope.

🔎 Ask for:

• An asset register
• Maintenance logs
• Replacement schedules

💡 Pro tip: Ask "When's the next big capex due?"—If they pause too long, start budgeting.

3. Staffing Surprises

The seller might say, "We're lean and efficient!"—which could also mean: no one's had a pay rise in five years.

🔎 Check for:

• Underpaid staff or excessive overtime
• Lack of contracts or benefits
• Key person risk (i.e. one employee does 6 people's jobs)

4. Outdated Tech or Systems

Running a modern business on a system built in 2003? You're not buying a business—you're inheriting a digital museum.

🔎 Ask:

• What platforms are in use?
• Are there licenses or subscriptions due for renewal?
• What's the backup plan? (If the answer is "John's USB stick," worry.)

5. Overly Optimistic Working Capital

Some sellers leave the business with bare cupboards—no cash, no stock, no invoices left to collect.

🔎 Look at:

• Inventory levels
• Debtors (who owes money)
• Creditors (who the business owes money to)

💡 Ask: "What am I walking into on Day 1?"

🎭 Classic Seller Lines and What They Really Mean

"That's never been a problem before."

Means: "It will be your problem."

"We've always done it that way."

Means: "It's outdated, inefficient, and the staff hate it."

"The lease renewal is straightforward."

Means: "It might be. We haven't asked."

💼 Cost Categories to Double-Check

Category	Watch Out For
Premises	Imminent rent hikes, lease expiry
Utilities	Underestimated seasonal costs
Insurance	Lapsed policies, personal cover
Marketing	"Free" channels that actually cost time
Legal & Compliance	Pending lawsuits, regulatory gaps

☘️ Bottom Line

Buying a business without checking for hidden costs is like buying a secondhand boat and forgetting to ask about leaks.

Be curious. Be a little nosy. And if something smells off, assume it's a cost you'll inherit.

Remember: due diligence is cheaper than regret.