Finding A Business For Sale

Finding a good business opportunity is not always easy.  Sources to consider:

·         Printed advertisements

·         Trade sources and suppliers

·         Friends and acquaintances

·         Intermediaries such as business brokers or acquisition specialists

·         Real estate brokers, if there is property for sale with the business

·         Targeting a business and inquiring about its availability

EVALUATING THE BUSINESS

As a buyer, first evaluate a business by reviewing its history and the way it operates. Develop an understanding of the business method of acquiring and serving its customers, determine how it generates its sales, learn its marketing strategy, and develop an understanding of its finance and operations functions.

Checklist of material for the evaluation process*

To evaluate the business and make a reasoned buying decision, the following information (if applicable) will be needed from the existing business:  

·         3-5 years financial statements

·         3-5 years tax returns

·         Interim financial statements

·         Projections

·         Debt schedule

·         Accounts receivable and aging schedule

·         Accounts payable and aging schedule

·         Details of equipment leases and other contingent financial commitments

·         Inventory list

·         Supplier list (including contracts)

·         Customer list (including contracts)

·         Organizational charts and employee contracts

·         Copies of all real estate, leases, or deeds

·         Industry information to which the owners may have access