Did you know that you can start a business today…right now? While building a business from scratch has its own advantages, buying a business is one of the fastest ways to start working from home. There are many advantages to buying a business including brand recognition, working systems, existing customers, available inventory, and support and training. Nevertheless, buying a business also comes with potential problems and issues such as costs, risks, and sometimes limited control such as when buying a franchise.
There are four different ways to buy a business:
1) Buy an existing business that was started from scratch by someone else.
2) Buy a franchise.
3) Buy business opportunity
4) Buy into a direct sales company
All offer a host of advantages and disadvantages, so before signing a contract and paying your money, do your research and get answers to the following questions.
Buying a Business Checklist
Below are a set of questions you should answer before buying a business whether its an existing business, franchise, biz op or direct sales. This is a generic checklist. You can get business type specific check lists such as Franchise Buying Checklist in The Work-At-Home Success Bible.
- Who is the seller/company? Did he/she start the business and if not, who did?
- How long has the business been in existence? How long has the seller owned it?
- Why is it for sale?
- What is the price? How was the price determined?
- What does the price include?
- Is there inventory? What is its value?
- Are there any equipment or materials included in the sale?
- Does the purchase include ownership or use of logos and the brand?
- Is a customer database included? What is the size and purchase history?
- Does intellectual property rights convey with the sale (trademarkes, patents, copyrights)?
- Will the seller provide training and support?
- What is the current financial state of the business? Debs? Assets? Accounts receivable?
- Does the business/seller have contracts with specific ventors/contractors and will those relationships transfer to you?
- Is the business required to operate under any laws, franchise or license rules, or other agreements?
- What is the history and track record? What are the last two years of sales and returns?
- What current marketing campaigns are running?
- What is the reputation of the business?
- What is the quality of customer service?
What is crucial to know is what EXACTLY are you getting for your money. If you buy a business but the sale doesn’t include the brand or customer database, you actually aren’t buying very much. You also want to make sure you’re not buying a business that is on the verge of bankruptcy. Finally you want to know what laws or legal obligations the business is required to work under or uphold.
Leslie Truex is an ideaphoric writer, speaker, entrepreneur, social worker and mom trying to do it all from the comfort of her home. Since 1998, she’s been helping others create careers they love by providing work-at-home information and resources through Work-At-Home Success.
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