Purchasing an existing business usually costs more, but can greatly reduce the odds of failing. If you decide to search for an existing business, you’ll need to prepare for careful analysis. Your decision making process needs to be highly analytical and free of emotions. When properly completed, a business analysis will reveal the truth and make the decision to purchase or walk away clear and straightforward.
You may want to seek the assistance of a qualified Business Broker to assist with the business search and purchase, or you can elect to complete the process on your own. Regardless of how you proceed, it is imperative that you demand sufficient information from the Seller and obtain sound legal and accounting advice prior to making a final purchasing decision.
You want to fully understand what the Seller does each day and be certain that you can achieve the same results. Question whether or not the customer base is tied directly to the Seller and the impact the sale will have on the customers. Refuse to accept information that is not validated by business tax returns. Sellers can manipulate income statements, but not tax returns. (more…)