Buying Tips

1. Buy a Business You Like!
   Many business buyers think the most important quality in a business is profitability. Certainly, you want a business that will have sufficient earnings to provide for you and your family. BUT, you will risk making a terrible mistake if you do not BUY A BUSINESS YOU LIKE. Suppose you find a septic tank cleaning business that makes lots of money and can be purchased for a reasonable price with great terms. Unless you want to pump septic tanks, the fact that the business makes lots of money is of no importance at all. If you bought this business because of the income, you will spend long, miserable days in the business and will end up neglecting the business and selling it later at a loss.
2. Don't expect "traditional" financial information from the owner of a privately owned business.
3. Tax returns of a privately owned business are prepared to show as little income for tax purposes as possible.
4. You and the owner of the business should like each other.
5. High street banks may not lend against goodwill based acquisitions so be prepared to be flexible in your approach.  Other lenders or the vendor might be able to help but you’ll often need a sizeable “liquid” deposit and / or security.
6. Don't use all of your cash - you will need reserves.
7. You must make an "offer" before you have seen all of the financial and other business records of the business you are interested in buying.
8. When you think about buying a business, think about what you like and don't like.
   If you fix on a particular type of business, visualise yourself running the business. Imagine taking your friends and relatives to see your business. Do you like what you see? Will you be proud to own the business? If not, or if you are not sure, don't buy that type of business.
   
9. Be Flexible
   If you lock onto only one type of business, it will take you much longer to find a business to buy. We like to start a buyer thinking about what they like and don't like using the following broad categories of businesses. First decide if there are any categories that you absolutely do not want to be in. Then focus on the remaining categories and review their characteristics as presented below.
   - Retail
   - Service
   - Manufacturing
   - Distribution
   - Restaurant
   - Lounge
   - Coin operated businesses
10. Once you have selected a primary category, you can begin to look for a business in earnest.
    You will find many different businesses within each category that share the primary characteristics of the broad category. You will then have to "fine tune" your selection. For example, within the retail category, we have clothing stores, shoe stores, boutiques of all types, bicycle shops, etc. The restaurant category, ranges from full service restaurants to ice cream stores.
11. JUST BE SURE YOU LIKE IT BEFORE YOU BUY IT!