1. Decide what type of business you wish to buy and analyse the market thoroughly.
2. Review your skills, knowledge and experience.
3. Decide on the type of products or service to be sold and the kind of market to be served.
4. Consider the location of the business.
5. Once you have created a profile of the desired business, start to put together a list of potential targets.
6. Research the list of businesses and narrow it down to 2 or 3 good options.
7. Obtain comprehensive information from the present owner of each business including the business plan and accounts and analyse these further.
8. Determine a price range for the business before negotiating with the seller.
9. Look at your financial situation and investigate additional sources of finance.
10. Draw up a Deed of Transfer specifying exactly what is being transferred to the new owner.
11. Set out the payment structure and consider deferring part of the payment until later.
12. Agree which warranties and indemnities will be provided by the seller.
13. Negotiate the final terms and close the deal.
Do's and Dont's:
Do:
Conduct thorough research.
Examine all information given by the seller carefully.
Seek advice from a variety of sources.
Consider using a business transfer agent or a financial adviser.
Include a clause in the Deed of Transfer concerning undisclosed liabilities.
Don't:
Consider buying a business outside your are of expertise.
Rely on the seller's figures for areas such as profit projections.
Forget to complete legal due diligence including contractual obligations and checks for law suits, past, present and pending.
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