subject: Do's and Don'ts of buying an existing business [print this page] Do's and Don'ts of buying an existing business
If you don't want the hassle of starting your own business and building your reputation and client list from scratch, you could always buy an existing business. With any luck, the previous customer base will keep coming back and you'll be able to bring in even more business, creating a profitable asset in very little time.
However, there are some things to be aware of when buying and selling a business. Here are some do's and Don'ts of buying an existing business:
First of all, why are the owners selling the business? You need to carefully consider their reasons for selling, and what you plan on doing differently to ensure you don't end up in the same situation. Is the business badly run? Did they open in the wrong area? Were they not advertising to their target market? Did competitors push them out of the market? Is the business solid but in need of serious rebranding? Are they simply moving on to bigger and better things?
Make a plan for how you will rectify the situation and make the business into a success.
Research the business thoroughly. Check the Internet and newspapers for any bad press. Look up their business records, and if it's a restaurant or club read customer reviews. Ask clients for their opinion of the business. Find out whether your future business has that all-important good reputation.
Look into the staff: remember, when you take over an existing business, you're obliged to keep the original staff onboard. If it is the staff that caused the business to turn sour in the first place, is that really a place you want to buy into?
Have a lawyer check into the business and the contract. This is extremely important. Your lawyer can tell you if the business license is up to date and correct for the type of business. He or she can also see if there are any debts the business owes, or any disputes with staff members or clients still outstanding. If there's something wrong with the deal, a good lawyer will find it.
Hiring a lawyer to check over an existing business before you buy could be the smartest business decision you ever made.
Smith and Partners are a law firm specializing in business and property law. We are experts in all legal matters and provide regular advice about business law and buying a house via ourLegal Advice Blog.
