Buying an exsiting business

**jjpullin** · 09-05-2008 10:17 AM

What does everyone think about buying an existing business?
What are the procedures in buying a business from someone else?
What should look for?

The business I am looking to buy is a WISP in a rural area. I have wanted to start a business like this for sometime. First, I was thinking of starting it from scratch. However, see an opportunity to buy this one with subs.

What is your opinion?

**jeremylorino** · 09-05-2008 10:49 PM

You must do your research multiple times when buying a business. The most important detail is to find out first and foremost why they are selling the business. Be sure to ask for their books then ask for their tax returns. I had a potential company that I was trying to buy, a liquor/cigar store, and it looked fine in their books but their tax returns looked a little out of sync with their books.

Have an accountant look over their financials after you acquire them because unless you are a CPA you aren't "qualified" to look at them. Granted lots of people do their own accounting. It's just that if the books are 'cooked' a good account should be able to find the anomaly.

You always, always need to do your own market research for the business. I would never trust a business because they are trying to sell themself to you and that's all about marketing. My liquor store owner neglected to mention that there was a Spec's Liquor Store going in a couple blocks away. Hmmm maybe that's why he wanted to leave.

Buying a business is always a good way to surpass the startup frustrations and slip into a money-maker. Just do your research and do it well. Be patient and take your time because jumping into a deal that you are not 110% positive about is bad risk management.

**dvduval** · 09-07-2008 06:51 PM

You've got to be willing to look at their books closely and study all of the important trends related to profit and loss. Often people are selling because the profits are not as good as in the past. If you have cash, sometimes in a weak economy (like right now), you can find good bargains that will likely increase in value when economic conditions improve.

**Oliver H** · 09-07-2008 06:52 PM

Originally Posted by jeremylorino

You must do your research multiple times when buying a business. The most important detail is to find out first and foremost why they are selling the business. Be sure to ask for their books then ask for their tax returns. I had a potential company that I was trying to buy, a liquor/cigar store, and it looked fine in their books but their tax returns looked a little out of sync with their books.

Have an accountant look over their financials after you acquire them because unless you are a CPA you aren't "qualified" to look at them. Granted lots of people do their own accounting. It's just that if the books are 'cooked' a good account should be able to find the anomaly.

You always, always need to do your own market research for the business. I would never trust a business because they are trying to sell themself to you and that's all about marketing. My liquor store owner neglected to mention that there was a Spec's Liquor Store going in a couple blocks away. Hmmm maybe that's why he wanted to leave.

Buying a business is always a good way to surpass the startup frustrations and slip into a money-maker. Just do your research and do it well. Be patient and take your time because jumping into a deal that you are not 110% positive about is bad risk management.

That's probably the best advice you're ever going to get.