This article are provided for information purposes only, and are not intended as legal advice.


Buying a business checklist

March 26th, 2010

You have decided that you wanted to buy a business but do not know what questions to ask or what you are looking for.  Here is a partial list of questions that may be helpful when you start to look for a business:

 

  • is this a seasonal business?
  • how large is the largest customer?
  • what per cent of sales do the top 10 customers make?
  • is there any economic dependence on any one or two customers?
  • how many suppliers are there?
  • is there economic dependence on a supplier?
  • are their other companies who can supply the same or similar product?
  • what are the hours of operation?
  • how involved are the owner of the business?
  • how knowledgeable are the staff?
  • how long has the staff worked in the company?
  • what is the potential cost of severance if you were to terminate an existing employee?
  • is this an incorporated or unincorporated business?
  • what is the owner selling – shares or assets?
  • is the company’s tax filings up to date?
  • is the internal accounting records up to date and computerized or manual accounting?
  • when was the last time that the company was audited by the tax authorities?
  • review the last tax returns of the company
  • review the notice of assessment and reassessments
  • are there any potential lawsuits?
  • how old is the equipment?
  • is the equipment in good shape?
  • does it need to be replaced?
  • how long is the lease?
  • is the lease transferable?
  • can the business be relocated?
  • is there enough space to grow the business?
  • does the business have high staff turnover?

 

 

These are a few items that you can ask when looking for a business.


Filed under: Buying a business — Gary Landa @ 8:47 am


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