Questions When Buying a Business

Buying an existing business can be a wonderful experience or a nightmare. Don't let anyone talk you you into something that is not what you really want and are willing to work hard at. It does not have to be wildly profitable but it does have to have the potential to make it great using your new ideas. Ask yourself some of these questions before you commit.

 *Do you like the business? the products and services
 *Do you like the location?
 *How old is the business?
 *Profitable or not (not always important)?
 *Will suppliers transfer open credit to you?
 *Are there employees? (talk to them)
 *What are employees paid and benefits?
 *Will valuable employees stay after a sale?
 *It there inventory and what is its value?
 *Is inventory current or obsolete?
 *Is all the equipment working properly?
 *Will landlord write a new lease at favorable terms?
 *Who will train you to run the business?
 *How many competitors will you have?
 *How long will it take to learn the business?
 *Who will answer questions after you take over?
 *Are there any unseen problems that could occur?
 *Will you have to accept any debt on the business?
 *Is there owner financing? (owner will help more)
 *Is there a customer mailing list or email list?
 *Will current owner sign a non-compete agreement?
 *How big is the target market?
 *How will you reach potential customers/clients?
 *For retail, can you get the demographics?
 *Can you live with the hours it takes to succeed?
 *Would you buy from this business?

Financial statements don't tell the full story and are made to look good. Check the overall business and decide if you can do things that the current owner is not doing to make it more successful. Once you are the owner you call the shots and can use your ideas to grow the business.

Barry is a speaker and consultant that assists in buying or selling a business.  www.idealetter.com