8 Tips For A Business Buyer Part 2

What should you know, before you buy a business? On today's episode, I am going to give you part two of a two part series, 8 Tips to Know Before You Buy a Bu...

Number 5, Get a Non Compete

This is an important point for a buyer, make sure the seller will not open up the same business under another name in a location close to the business you are purchasing. A buyer needs to make sure they are protected with a non compete.

Number 6, Strong and Clean Financials

During the sales process, you will want to review, the past three years of profit & loss statements, bank statements and tax returns. You need accurateness in the records, but also encouraging trends. Key trends could include increase of sales, profits, or customers.

Number 7, Independence from the Owner

It is easier to buy a business where the owner is less hands on. Businesses that have a technical role such as medicine or engineering are more hands on and tougher to replace the owner.

Number 8, Favorable Sales Trends.

You will want to buy a business with upside, so a stable and/or positive trend for sales is a must. In addition, if one client represents more than 20 percent of revenue that can be a red flag as it puts sales at risk if that business is lost.