Buying a Business

Do

• have your lawyer and other service providers complete a due diligence on the business you propose to acquire.
• check that all large suppliers are tied to the business and that the vendor isn’t in breach of his trading terms
• arrange for all key personnel of the business, whom you are retaining, to be contractually tied to the business.
• research the business and be aware of all the risks and stresses involved, not just the financial risks.
• ensure you have full family support, and that they are aware of the benefits, risks & stresses.
• ensure you have structured your purchase to minimise the risk to your personal assets

Do Not

• rely on or accept the vendors comments regarding cash takings of the business which are claimed to be over and above those recorded in the business’ financial statements.
• accept possession of a leasehold business until a legally enforceable lease is entered into, or that the transfer of the current lease is completed. Where applicable mortgagees and/or chargees must consent to such a lease
• agree to pay for the Goodwill of the vendor, without having a signed restraint of trade from the vendor, and it’s office bearers.
• accept stock which is not of saleable quality. Stock should be valued by an independent qualified third party.
• rely on verbal agreements & promises, if it’s not written it’s not done.