Buying a Business

1. What are you buying ? ........ Corporation or assets of a Corporation?

• Real Estate • Fixtures • Equipment • Inventory • Accounts receivable • Pre-paid services • Good will • Customer list • Name (if registered) • Liabilities • Phone numbers

2. Are there balances due?

• Unpaid bills • Back taxes • Liens • Gift certificates • Customer
deposits • Merchandise in transit • Items under construction

3. Will you get landlord wavers where needed?
• Installed equipment/Fixtures • Air conditioners • Refrigeration • Soda & other coin operated machines • Others

4. Are all leases transferrable?

• How long is the lease • Does it have an escalation clause or a balloon

5. How about CAM charges?.... (Common area maintenance)

6. What is their credit rating?

• Will prior bad ratings effect your business • Have you checked major suppliers and D&B

7. Are there employees?

• Are their benefits and withholding up to date • Can you easily dismiss them • If they are essential, will they stay • Do they have special employment contracts

8. Are there licences required?

• If so are they transferrable • Can you qualify • Are there any waiting periods

9. Will you get a Non-Compete clause with the sale? For how long?

10. Will you keep the phone number?

• How long is the directory commitment, can you afford it • How much business does the phone bring in

11. Are there any pending law suits of judgements?

12. Have you seen 3yrs. (Schedule C) of their Income Tax return?

13. Are there recent register tapes? Bank deposit slips?

14. Have you talked to Sales Reps, Supply Houses and Competitors?

15. Have you checked the customer count?

• On different days • At different times

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16. What changes have occurred in the neighborhood?

• New business openings • Redirection of traffic • Additional traffic
or new traffic signals • New traffic islands • Deterioration of housing

17. Was a large percentage of the business done "out of house"? ....Will you keep it?

• Outside sales people • Personal contact • Friendly bids

18. Are there large buyers or clients involved?

• If they don't renew, how will it affect the business • Are School bids or Government bids a big segment of the business, How safe are they

19. Why does the seller want to sell?

• Is it valid, have you checked

20. Will the seller help with financing? If not - why not?

21. How do your needs/expectations differ from the sellers?

22. Is their history compatible with your future?

• What was their life-style • Will it satisfy you • Do you have any special needs financially or physically • Are you and your family willing and able to devote the time

23. How can I determine the real value?

• Did you get ALL the figures • Have you consulted a CPA • Have you considered the cost of money, borrowing if you need to or l