Many people assume that starting a business mean that they should start from scratch. They need to come up with their own ideas and build the business from the ground up. This can be a great idea if you know how to maneuver around the distinct challenges that it will lay on you. But, it could be a blessing to know that you can skip those and just buy an existing business.
Assess the inventory to determine its condition, salability, age, and quality. Inventory refers to the entire materials and products inventories for use or resale in servicing the customer.
Examine the quality of the building, equipment, fixtures, and furniture. This is where you’ll find out the changes you’ll have to do in terms of office layout. You also need to purchase new items to fully function.
Analyze and get a copy of all legal documents and contracts. If the business that you’re going to get has valuable intellectual property, then hire a lawyer to evaluate it. When it comes to real estate lease, determine its terms — if it’s transferable or if you need the landlord to assign the lease.
For businesses that are a part of a corporation, check whether they have registered it. You also have to find out if it operates as a foreign corporation in its own state.
Hire an accountant to know the real financial net worth of the business you’re buying through their tax returns and financial statements for the past five years. Along with a lawyer, have your accountant inspect the complete list of liabilities to control legal ramifications and probable costs. Do not forget to examine all accounts receivable and payable.
When buying a business, ensure that you follow the checklist listed here. It might seem overwhelming, but keep in mind that this list is pretty short compared to building your own business from scratch.