Buying an existing business is a great way to start your money-making venture without the need to start from scratch. It lets you skip the risky start-up phase and begin operating as soon as the sale is complete. If you choose to buy a business, you will need to negotiate to secure the best deal.
The seller will surely give you an explanation, but don’t take their word for it. Sellers have their reasons, but make sure there are no underlying legal issues. Search for the real reasons by talking to others who are familiar with the business’ history, such as suppliers and employees.
Be sure the business is clear of liabilities.
Before completing the sale, the seller should have paid off any accumulated debts, so the business is clear. Learn if there are mortgages, back taxes, or other liabilities. You should also try to get complete information on undelivered purchases. While it is not exactly a good idea to assume liabilities, it may become necessary in certain instances. If you have to assume any liabilities, the value should be subtracted from the assets’ agreed-upon value.
Ask the seller to stay a few weeks after the sale.
It’s best if the seller continues to make an appearance after completing the sale to introduce you to suppliers, dealers, and loyal customers. This would also ensure a smooth transition for the business. Ask the seller if they could show you the ropes and consider paying them for their time.
Ultimately, be sure that the business you plan to buy is something you want to do and that you are prepared to meet all requirements under the law. Don’t make the purchase just because it’s a good deal. Keep in mind that you will have to work on it to make it a success.