Buying a Business

From my weekly (AM) radio segment titled "Legal Minute"

Starting a business is a lot of work so, for some, buying an existing business is often an easier and faster way to get into an industry. There is much that we need to do before buying any business. Start by considering a business in a field of which you know something about otherwise, you may not be able to assess if the value is a good one and you’ll have a steep learning curve to climb. Begin your search in your local community as you may find what you want by word of mouth. You can also try searching the newspaper, Internet, trade associations and business or real estate brokers. Once you make a selection, conduct a thorough review of the businesses’ finances, employee and customer contracts, assets, leases, and past lawsuits, if any. We lawyers call this process “due diligence” and it’s worth having a lawyer help you with the review. This is no time to be timid. Ask the hard questions and gather as much information as possible. After due diligence is complete, have the value of the business appraised. Then, you’re ready to negotiate the price with the seller and have your lawyer document the purchase in a formal agreement.