When setting out to buy a business I strongly recommend that you invest some time and effort in deciding on the type of business that you want to buy. Start with an analysis of your own knowledge and skills, experience and education, interests and preferences.

It is also important to determine what you want from the business in terms of approximate net profit. Decide how much you are prepared to pay in return for that profit.

Once you have found a business for sale which may be of interest, the process will basically be as follows:

The seller or his representative will ask you to sign a confidentiality undertaking and some form of declaration regarding the availability of funds. These are required to ensure that you will use the information only to evaluate the business and not for any other purpose. You should then receive detailed information on the business covering all salient matters, as well as detailed financial statements, to enable you to make an initial evaluation of the business. Should the business pass your initial evaluation, the next step could be to meet the sellers and make an on-site inspection of the assets. Feel free to request additional information.

At this stage you need to do some serious homework – use all available resources to get as much information about the industry and the market as you can.

Once you decide to go ahead with the acquisition of the business, negotiate the details of the agreement with the seller. Any agreement you reach to purchase a business must be subject to a due diligence investigation - that is an opportunity for you, your accountant and/or other advisors to examine the records of the business to confirm that the information previously given to you were accurate. A complete due diligence investigation will not only cover financial records, but will also carefully examine all other matters considered crucial for the continued success of the business. It is very important to pay proper attention to legal issues such as all contracts (lease, suppliers, customers etc) and compliance matters.

Please call us at any stage and we will be delighted to assist you with this process, and help you to take it further to the successful acquisition of a business that meets your requirements. Hopefully, this phase in your life and career will resemble the chrysalis, which turns into a beautiful butterfly.