thinking of buying a business...here are some considerations you will need to make...

Buying a business can take time, energy and some detective work. It is important that you do your homework to ensure that you buy the right type of business and that you pay a fair price for it. If you have a great business idea and are ready to work hard to build it from the ground up, then you may wish to start your own business. But if you want to hit the ground running and avoid some of the common start-up pitfalls, then buying an existing business or a successful franchise may be a better option for you.

Businesses for sale are often advertised in newspapers, on the Internet, by word of mouth or through trade publications. It will be necessary to investigate a little before buying a business.

Before deciding to buy a business, you should evaluate the condition and potential of the business. You will need to consider:


Are the building, equipment and inventory operational?

Does the business have a good reputation?

How visible and easily accessible is the business? Is it located in the city or out of town? You will have to take into account shipping costs that will be necessary, if you are distanced from your suppliers and customers.

Are the products or services generating revenue? Are sales increasing, decreasing or are they flat?

Is there a good working relationship with the suppliers and the bank that the business deals with?

If a deal seems too good to be true, it probably is. So, beware!

As a buyer, it all comes down to knowing what you can honestly afford before negotiations start. You should be flexible in your negotiations to buy, but also keep your budget and the value of the business in mind.

What is the value of the business?

You may want to investigate the value of assets, such as the building, equipment and products.

Other factors to consider are the business' financial statements, annual report and intellectual property (for example, patents, trade-marks, and so on).

Some valuable assets to any business are reputation, customer lists, quality of personnel, and so on.

some other considerations include:

Take your time and verify all information you are given before you commit yourself.


Buy a business within an industry you know well and with products and services you are comfortable selling.

Buy based on the return on investment and not the price.

Don't use all your cash for the purchase.

Investigate suppliers, clients and the reputation of the business before you buy.