12 Things To Consider While Evaluating And Analyzing A Business For Sale

There are numerous things to be considerate while analyzing and evaluating a business which is up for sale

. Its always a must that no hasty decisions are made or else you can suffer a huge loss. Always take your time to decide whether the business which is up for sale is worth the investment or not. Listed below are few ways which can help you decide on a good business opportunity.

Identify your personal goals for purchasing the business. Will the business you are considering match these goals?

Consider your lifestyle. There is prestige in owning your own business. Does this business fit your status and image needs?

Identify your personal goals for purchasing the business. Will the business you are considering match these goals?

Determine the location history. How long has the office supply store, for example, been in that location? Have other businesses failed and frequently turned over in that location? Sometimes a location carries a stigma and should be avoided. On the other hand, sometimes entrepreneurs purchase existing businesses just for the location and the lease.

Decide about location. Is the location convenient for you, and does it have enough traffic flow? Is the location convenient to your target customers?

Evaluate local economic and political conditions. What are the industry trends for this business? Is the market increasing or decreasing? What is the growth potential? What is the competitive environment? Is the market overcrowded with competition?

Assess the current staff. You are buying not just the company but also the employees. Who are they? Is there good chemistry among them? Do they appear to be ethical and honest? Check their personnel files, and look for any disciplinary actions and poor evaluations.

Run a background check. Contact the local better business bureau to determine if customers have filed a complaint about the business. For a fee, Dun & Bradstreet will give you an estimate of the worth of the business. Look for a local office in the Yellow Pages.

Consider your financial needs. How much money do you want to make? How much money will you need to purchase the business?

Look at the surrounding and physical conditions. Is any remodeling needed? If so, estimate the costs for such remodeling.

Review corporate tax returns. Remember that a seller won't exaggerate the business worth to the buyer. If the seller cannot provide financial information for the past three years, this is an indication that something is amiss.

Choose the right seller. The owner should be both cooperative and willing to disclose all the financial and personnel, customer and legal information related to the venture. If the owner is resistant to sharing this information, you have reason to be concerned.

Meet with customers. Determine their level of satisfaction with the business. In any walk-in business, always talk to customers who come into the store. Also, talk to former customers and find out why they are no longer buying from this store.

Listed above are 12 important factors which need to be considered when deciding on which business opportunity to look after. Take your time; dont rush up with the business transaction. Planning and preparation are the key factors to success.

by: pauldarreman

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