Business Financial Affairs
- Get access to financial information.
- Define what realty, goodwill, equipment and inventory are included in the sale.
- Define what is the actual market price of the property.
- Determine if it will be asset or stock purchase.
- Research if any business obligations or debts will be inherited.
- Learn business balance sheets and income statements for at least three years and for current year.
- Study business tax returns for past three years.
- Determine additional working capital that will be needed to keep business running after the sale.
Enterprise/Operational
- Find out business history.
- Get the information regarding business reputation, date when it was established, history of development, business ownership structure.
- Get the copy of franchise agreement if it is used in business, learn franchise fee or a transfer fee have to be paid.
- Determine whether upgrades are required as well as identify needed changes to business operations.
- Get the copy of unsigned proposed buy/sell agreement. Study proposed terms of the buy/sell transaction.
- Investigate any business leases for equipment, property, etc and check whether these leases are transferable.
- Research local laws to assure compliance.
- Demand from seller an explanation of his/her reasons to sell the business.
- Determine if you will be able to continue using of the enterprise's business name, patents, trademarks, trade secrets, product names and any other proprietary information.
- Research any licenses that may be required to maintain business operations and check the costs.
- Determine whether or not the seller will offer a non-compete agreement after transfer of ownership.
- Determine if there are any customer product warranties issued by the company that may be future obligations.
Personnel Information
- Learn the company staffing requirements/policy and key employees.
- Analyze the roles and salaries of all employees in the business.
- Research existing employee contracts and benefit packages.
- Determine the likelihood that existing employees will stay with the business after the transfer of ownership.
Market and Industry Information
- Identify the products/services the firm provides.
- Acquire a list of competitors, suppliers, and clients/customers, if possible.
- Determine the market area of the business and method of distribution.
- Research the industry.