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 agreementStudy 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.

Buying a Business Checklist

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