Tip on Buying a Business

1. Choose a business that really interests and excites you – passion is a key ingredient to success;
2. Determine the best plan to finance the purchase of a business. This will be negotiated with the Seller, but it is good to have an idea of how you intend to finance the business purchase beforehand;
3. Meet with several banks to determine which one wants your business the most;
4. Conduct adequate market research to confirm that there is sufficient demand and not an over abundance of supply for the product or service that you will be offering;
5. Have a lawyer review any agreements, contracts, etc., that you enter into;
6. Ensure to include a “due-diligence” provision / condition in any agreement that you enter into;
7. Once you enter into the “due-diligence / conditional” period of an agreement, take advantage of this period and do your homework with the help of your accountant, lawyer, business associates, appraisers, realtor, etc. With the assistance of others, you should review financial statements and tax filings, agreements such as the lease document for the premises or equipment, employment contracts, insurance policies, franchise agreements, etc.;
8. Compare your business goals and plans to the key elements of the business that you are considering to purchase;
9. Ask the key question: “Why is this business for sale?”
10. Seek an non-competition provision from the Seller.