10 Points to Consider

10 Points to consider

1. If you are considering buying a business it is important to buy a business that you understand and have experience in.


2. When buying a business, ask the following questions -


• If the business is profitable, why is it for sale?.


• Are there three year's audited accounts, audited by chartered or certified accountants ?


• What is the local competition.


• Will the staff remain.?


• Will the business be affected by the change of ownership ?


3. If you employ staff, you must be able to do the jobs that the staff are employed to do. You will then be able to judge performance and set targets.


4. A business is only as good as it's staff. The staff must be properly trained, and rewarded for performance.


5. If possible, always buy a Freehold business. If however, your budget can only stretch to a leasehold, ensure that there is a long lease (21 years) with the option to buy the freehold.


6. Most businesses fail because they are initially under capitalised. Ensure you have a capital reserve, especially in the first six months.


7. The audited accounts will determine whether or not the business is viable. The three year's accounts will show a profit/loss trend. The accounts should show a steady increase in turnover, gross and net profit.


8. When making your cash flow forecast for the oncoming year, be conservative with your estimates.


9. Ensure your insurance policy covers all the business liabilities, and possible misfortunes.


10. Lastly do not let the business, rule your life. At the end of the day lock up and return to your family life, your sports and your hobbies.