If you’re in the market to buy a business, then you’re in luck. You’ll have an easier time finding a business than in the past. There’s been a rush of people starting small businesses, and many of them have reached retirement age. You also have access to various markets, such as the internet, to find businesses for sale. That’s all good news for you.
You have to be careful when buying a business. You can actually get into more trouble than you realize. Here are some questions you should ask before signing on the dotted line. Some of them you’d probably never thing to ask!
1. Is there anything hazardous or illegal lurking within the business? Most people focus on numbers when contemplating buying a business. They worry about the worth of the business, and want to know how much they can make. However, there are many other things to ask about.
For instance, has the business had any trouble with the government? Has there been trouble with taxes or any other illegal activity? Is the business located in a safe area? Is the business located in a high crime area? The current owner might omit this information – unless you ask.
You should also ask about crimes on the location. If the business was the scene of a crime, then that could affect performance. It could scare away customers or clients. You need to know everything about the business, good and bad.
2. How do customers or clients rate the business? The seller might provide testimonials from people who have favorable things to say. That makes sense, after all, the seller wants to sell the business. However, it would help to get an unbiased opinion from someone the seller didn’t pick.
Take time to speak with people who have experience with the business. Find out how they really feel. The business might have bad customer service, a mediocre product, inconvenient hours or some other negative situation.
You might discover that you’re about to inherit a serious problem. In fact, you could discover something that makes you not want the business!
3. Which marketing tactics does the business use? Marketing is what keeps people coming in the front door. It wouldn’t hurt to ask which marketing tactics work for the business. The information allows you to do more of what works and none of what doesn’t work.
You can also see if you need to try any new marketing tactics. For instance, perhaps the business doesn’t have a web presence. You’ll know that building a website and creating an email marketing list is something to consider.
4. Is seller financing available? Some sellers are open to helping buyers get the money to buy the business. Seller financing is when the seller finances all or part of the purchase.
If you don’t want to bother with the banks, then ask the seller about financing. Some sellers won’t agree to financing because they want the money from the sale. On the other hand, some are willing to finance the sale just so it will take place.
The seller might refuse your request, but it doesn’t hurt to ask.
You must be careful when buying a business. Don’t be afraid to ask the questions that will put you at ease.
You are welcome to use these articles and posts if you find them useful however you must not change them in any way whatsoever and must acknowledge John Van Hulst of WhatPriceMyBusiness Pty Ltd. as the author.