Many people decide to buy a business because they think it will be less work than a 9-5 job, or they think that at least they can’t be sacked. The first is simply not true and while the second may be true, a business can easily fail and so in that way they will lose their job – and often much more. So before you purchase a business, consult with commercial lawyers and an accountant to make sure it is a good deal.
Meanwhile, here is a checklist of things to see about before you buy.
- Make sure the sellers are not due for pending litigation. This can point to problems with the business.
- Do your financial due diligence by having an accountant crunch the numbers you’ve been given. They will soon seen if the profit has been artificially inflated just prior to selling.
- Find out what the lease is on the business. If it is due soon and the landlord only gives short leases, this could be a red flag for a poor business choice.
- Set goals for your business and ensure that there is nothing to prevent them from happening. Make sure the lease is fair and renewable and that there are no hidden costs.
- Before choosing business to buy, make sure there is a good market for the things it sells.