Checks to consider before pouncing on business for sale

We all would have seen signage citing “Business for sale”. It could be across any sectors, across all industries. Growth for a company in any industry can come from only two sources. One is organic growth, where the company uses its products to build up more customer base and in turn, generate more revenue. There is the other source of growth, or the inorganic growth mode. Here companies buy up business for sale and expand their product portfolios. This too could lead them to generating higher revenues. Mentioning below are the important checks that should be made while considering buying a business that is for sale:

1. Stock: This refers to all products and stuffs stored for resale. You or your qualified representative must be present when these businesses for sale are clearing up their inventory. You should understand the position of stock, what’s on hand and what was in stock at the end of the last financial year and the one before that. Have the stock appraised. This is a firm asset and you need to know the value to assign it. You could bet a bank such as a Massachusetts bank to value the business. Also, check the how old is it? Its quality, condition etc! Affirming the value often inventory is a subject of negotiation.

2. Furniture, equipments and structure: This encompasses all products, equipments and assets. Get a listing that accepts the make and model number of each equipment. Then determine its present shape, market value when purchased versus present market value, and whether it was bought or rented. Learn the changes you have to do to the structure or layout so as to suit your needs.

3. Contract copies and legal documents: These legal papers must include all hire and purchase agreements, distribution arrangements, subcontractor agreements, sales and union contracts, employment agreements and any other instruments that can lawfully hold the transferable business. All real estate papers if you are considering taking his land for a lease. Find out whether it is transferable, etc.

4. Financial statements for the past 5 years: Evaluate these statements, taking on all records and financial records. This is very important for learning the earning ability of the business.

23 thoughts on “Checks to consider before pouncing on business for sale

  1. I partnered with a company to purchase another company. My partner now has decide they would like to complete the purchase themselves and pay me a finders fee for my time. I am OK with this but am unsure about an amount. The total purchase will be approx $3.5 million. Thanks for your help!

  2. Has anyone gone shopping this weekend at Circuit City? I was wondering how good of sales they’re having. I don’t want to go down there & deal w/ madness for 10 or 20% off of something. Are they having huge discounts or what? If you have gone to Circuit City, respond with some of the items on sale you saw.

    Thank you in advance for your responses.

  3. Many thanks for the responses. It is the sale of a business (a viable cafe) to another for which I need to produce a receipt.

  4. I have never seen the Borders near me so packed with people actually buying books and CD/DVD’s until yesterday. Maybe they can drag it out for a year or two by buying new merchandise, not just the stuff from the warehouse. Then re-open up under a different name and repeat the process.

  5. Recently I purchased cheap SEO package in internet consultant online. but my web site got top in Google . i go lot of link from different website As a result i am getting traffic and sale . I purchase for 3 month . Will i purchase one year from internetconsultantonline.com ? Any one suggest me good or bad ? which seo package good for business sale?

  6. I have a small Point of Sale business starting up. We are looking for ways to generate sales leads. We have considered using sites like gumtree.com and other free site to list a commission based opportunity.

    Is there a lead-generation business out there that we can buy the leads from?

  7. CDs normally sell $ 18.00. During the first week of the sale, all CDs will sell for $ 18.00. During the first week of the sale,all CDs will sell for $ 15.
    Written a fraction, what is the rate of the discount?
    What is this rate expressed as a percent?
    Round your abswer to the nearest hundredth of the percent.
    During the second week of the sale,the same CDs will be on sale for 25% off the original price.
    What is the price of a CD during the second week of the sale?

  8. My sister is saleing her grooming salon and she wants to know what are good “free” sites to post that her business is for sale!

  9. Recently I purchased cheap SEO package in internet consultant online. but my web site got top in Google . i go lot of link from different website As a result i am getting traffic and sale . I purchase for 3 month . Will i purchase one year from internetconsultantonline.com ? Any one suggest me good or bad ? which seo package good for business sale ?

    http://www.inetrnetconsultantonline.com

  10. I am planning to buy a good business where I can have good cash flow. Could any one suggest me what are the best website I can find the business for sale.

  11. Has anyone gone shopping this weekend at Circuit City? I was wondering how good of sales they’re having. I don’t want to go down there & deal w/ madness for 10 or 20% off of something. Are they having huge discounts or what? If you have gone to Circuit City, respond with some of the items on sale you saw.

    Thank you in advance for your responses.

  12. Has anyone gone shopping this weekend at Circuit City? I was wondering how good of sales they’re having. I don’t want to go down there & deal w/ madness for 10 or 20% off of something. Are they having huge discounts or what? If you have gone to Circuit City, respond with some of the items on sale you saw.

    Thank you in advance for your responses.

  13. I have never seen the Borders near me so packed with people actually buying books and CD/DVD’s until yesterday. Maybe they can drag it out for a year or two by buying new merchandise, not just the stuff from the warehouse. Then re-open up under a different name and repeat the process.

  14. So my parents own a restaurant that is currently on a month to month rent (i.e. no lease agreement because they decided not to renew it). They’ve been wanting to sell the business for quite some time. They finally found a buyer that’s willing to buy the business and equipment and negotiate a new lease with the property management firm. Now they got a phone call from someone representing the firm saying they have rights to take half of the profit from the sale. Is this even possible? What regulation cites this right?

  15. I am wanting to start a store where people donate items to you and you reslae them much like Goodwill or the DAV. What would I need to do to start this? Also, what type of legal paperwork do I need to ssell donated items?

  16. Has anyone gone shopping this weekend at Circuit City? I was wondering how good of sales they’re having. I don’t want to go down there & deal w/ madness for 10 or 20% off of something. Are they having huge discounts or what? If you have gone to Circuit City, respond with some of the items on sale you saw.

    Thank you in advance for your responses.

  17. Has anyone gone shopping this weekend at Circuit City? I was wondering how good of sales they’re having. I don’t want to go down there & deal w/ madness for 10 or 20% off of something. Are they having huge discounts or what? If you have gone to Circuit City, respond with some of the items on sale you saw.

    Thank you in advance for your responses.

  18. Currently, I am a mba student, and I am really interested in finance. So I wanna find an interesting topic in corporate finance to write a paper, through which I can mine more knowledge in this field. Thanks for your help.

  19. I can’t find much information on this. What’s the process? Do you have to buy the entire estate and then try to sell it off at your own sale? Thanks for ANY help on this!

  20. I can’t find much information on this. What’s the process? Do you have to buy the entire estate and then try to sell it off at your own sale? Thanks for ANY help on this!

  21. I am doing marketing homework and need some help. What type of products are more likely to be standardized and go global across countries? What type of products are less likely?

    Try and be as specific as possible, I missed class and the notes are horrible..So I need to answer this.

  22. Has anyone gone shopping this weekend at Circuit City? I was wondering how good of sales they’re having. I don’t want to go down there & deal w/ madness for 10 or 20% off of something. Are they having huge discounts or what? If you have gone to Circuit City, respond with some of the items on sale you saw.

    Thank you in advance for your responses.

  23. I have never seen the Borders near me so packed with people actually buying books and CD/DVD’s until yesterday. Maybe they can drag it out for a year or two by buying new merchandise, not just the stuff from the warehouse. Then re-open up under a different name and repeat the process.

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