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Beware...Are you Buying a Business, a Job or a Future Crises?

Posted 9/13/2014


By Paul Marshall

When one finds a business to buy, one will need to consider a number of points before deciding whether to purchase it.


Not all business will stack up. In fact, you may be buying an average paying job, an underpaying job, an underpaying and overworked job or...A CRISES.


You may want to take a very good close look at some key areas of the business and at least answer the following 21 point checklist.


 This quick 21 POINT CHECK LIST will go a long way on determining whether the business you are considering is a sound investment or crises that is about to put you in a padded cell.


 I am sure you don't want to experience a crises or end up in a padded cell so take not and read on...

 1 . Find the real reason as to why the current owners want to sell the business?

 2. Is this an industry you are passionate about and have talent in to make this business work?

 3. In there a long term lease and other contractual obligation in place and is there a right to renew?

 4. What type of growth potential does this industry and business have?

 5. Based on cashflow – is the business improving or declining?

 6. If the business is in decline, then is it fixable – and by you?

 7. Are the Balance sheets and Profit and loss healthy or should they belong in an EMERGENCY WARD?

 8. Is the business in sound financial condition? Have you seen audited year-end financial statements for the business? Have you reviewed the most recent statements? Have you reviewed the business’s last three tax returns?

 9. Are licenses or permits required to operate the business and if so – what are the costs of these?

 10. Is the business now, or has it ever been, under investigation by any government agency? If so, what is the status of any current investigation? Is there any sanctions?

 11. Is the business currently involved in a lawsuit, or has it ever been involved in one? If so, what is the status or result?

 12. Does the business have any debts or against it? If so, what are they for, and in what amounts? What are the penalties for late or nonpayment of debts?

 13. What percentage of the business’s accounts are past due date?

 14. How much does the business write off each year for bad debts? What is the reason for these bad debts?

 15. How many customers does the business serve on a regular basis?

 16. What is the lifetime value of the customers?

 17. What is the customer demographics i.e. who makes up the market for this business? Where are the customers located? Are they local or worldwide? What are their buying characteristics?

 18. Is the business held hostage by a customer i.e. - does any single customer account for a large portion of the sales volume? If so, would the business be able to survive without this customer? If not then how hard is it to keep this main customer fulfilled?

 19. Remember, the larger the customer base is, the more secure your business will be and the more it will easily survive the loss of any customers.

 20. Does the amount business vary from season to season?

 21. Who owns the fit out and fixtures?


These are some of the more key points that should be considered, clarified and totally understood before the purchase of any business.


Many businesses are overpriced, over stated and oversold to unsuspecting, hard working and genuine people willing to take a risk and are just trying to get ahead in life. The “owning and operating a successful business” path is littered with causalities.


Endure the pain of research before you endure the pain of loss.


For more golden tips on purchasing a business check out:

 103 Golden Tips to Turbo Charge your Business Make More Money and Get Rich  


Hope to see you again on the next blog soon.


Don't hold back and keep on smiling!




About the Author:

Paul Marshall is a HR Pro, a corporate trainer, and a trusted and welcomed business partner with commercial awareness and extensive expertise in people and performance capabilities.

He draws upon life experiences from a wide range of money making pursuits and adventures and translates this into simple “Golden Tips” to offer readers shortcut pathways to business and career success.

A veteran and industry expert in the HR and Business trends space and is often the go to guy when HR turns to sh*t.

More great tips here: 


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