When you buy a business, you have many factors that you have to consider. First, you have to determine is whether or not the seller has established the proper value for the business. That is determined by many factors. The first and most important one is, what are similar businesses selling for in that particular area? Certain businesses are very easy to establish value because there’s a network of people buying and selling those businesses. In the supermarket business, for example, you can do your due diligence by checking his sales records. Today, it’s a lot easier than it was years ago because most business have front-end scanning systems that permit you to look at runs of sales very easily.
The next thing is you have to make sure that you have enough money to operate the business successfully.
You also have to make sure that the lease and the location is secured properly. You have to communicate with the landlord to see that the lease is appropriate.
You then have to determine what you are going to do about running this business. Again, the important issue is having a plan. Are you going to be able to run this by yourself? Is your family going to have to be involved? Do you have the expertise or do you have to hire expertise? Do you have appropriate knowledge? If you can’t have the knowledge about what the business is, you have to determine how to get more expertise, either from a supplier or a consultant or somebody who has been in the business before.