Buying an Existing Business

The decision to buy an existing business may be one of the most important decisions you will ever make, so don't rush into it. Take time to obtain as much information about the business as possible.

The only true method of evaluating the worth of a business (and the price you are willing to pay for it) is to review its financial records (for at least the previous three years) and then ascertain its profit potential. Carefully review the company's balance sheets, income statements, tax returns, sales and purchase orders, and bank deposits.

You should never buy a business without consulting with a lawyer and an accountant. Written agreements should cover all necessary aspects, including what assets are to be purchased, what liabilities are to be assumed, and when the sale will be complete.