10 THINGS EVERY BUYER NEEDS TO UNDERSTAND WHEN BUYING A BUSINESS
I. Thou Shall Not Be Greedy!
Sellers deserve a fair price for
the years they have spent developing
their business. Be prepared to pay for
the goodwill of the business.
II. Thou Shall Have A Good Reason For Buying!
Buying a business is hard work! It takes a commitment! Spend time
deciding why you want the responsibility of owning a business.
III. Thou Shall Provide Background Information!
Be prepared with a resume and financial statement. Remember, the
seller will most likely be your banker and will want to know that you
can run the business successfully.
IV. Thou Shall Keep An Open Mind!
There are no perfect businesses.
V. Thou Shall Keep In Mind Tax Benefits!
Remember tax benefits are realized from intangible as well as tangible
VI. Thou Shall Offer A Reasonable Down Payment!
A low down payment indicates a lack of commitment. When sellers
question commitment, serious negotiations are in jeopardy.
VII. Thou Shall Realize Businesses Are Priced On Profits!
A business making huge profits with few assets could save you
money later in capital outlay for expansion.
VIII. Thou Shall Remember Time Is Of The Essence!
After all parties have agreed upon price and terms it is important to
quickly proceed toward closing.
IX. Thou Shall Be Prepared To Meet the Landlord!
Landlords usually have little to gain by cooperation. Therefore, come
to meetings armed with a resume and financial statements.
X. Thou Shall Avoid Surprises!
Disclose pertinent information early and avoid surprises that might
destroy your credibility.