Longevity Website

We were taught from a very young age that we needed to focus on our homework if we wanted to be successful in this difficult world. This analogy holds true if you are thinking of buying a business for sale and you need to do your homework before you even think about contacting anybody formally, as this is, realistically, the most important part of the whole procedure. You don’t buy business assets without going through the process of due diligence, looking through all the paperwork and financials to ensure that they are accurate and sustainable. In many cases this is the most important part of the whole process, but it is certainly possible to find out a lot of information way in advance, enough to make some critical decisions, before you even meet with the seller.

This is a good idea, as all kinds of variables can mess things up when you initiate that first contact. After all, the whole process could be concluded if something untoward is found. However, the main thing to realize is that this entire process will consume many of your viable resources, of which time is the most precious. Think of everybody you will have to talk to. Let’s list them — a bookkeeper, an expert valuer, the landlord, brokers acting for the buyer and the seller, a critical supplier or two, maybe even a key staff member, etc. A lot of work – and when you include the process of due diligence which can go on for up to a month in some cases, you certainly don’t want to begin any kind of formal procedure too early and would like to know as much as you can in advance.

It makes you feel that you need to be a Victorian sleuth who smokes a pipe, doesn’t it? You don’t need to go that far necessarily, but you do have that “upfront” process of due diligence to unravel, before you knock on the seller’s door. Plan by writing a short list. You will determine only the business types that are really suitable for you and don’t think about anything else. You have to be excited and motivated by the business and should not even look at the business if this is not the case. Once you have done so and identified your geographical territories, you should start by identifying each and every business in your niche within those areas. You might have other criteria to bear in mind, as well. If you are looking to buy a convenience store for example, you might not be interested in any option, unless it is situated close to a major artery.

Once you have your short, shortlist of potential candidates, your investigations must really begin. Use the power of the Internet and the true meaning of social media to reveal the good, bad and the ugly about each business prospect. You will soon find that you can dig up an amazing amount of information if you are persistent and should keep copious notes about everything.

You will often be able to eliminate a number of potential candidates during this initial, exploratory phase. A couple of well phrased, anonymous questions should be posed to third parties who may be involved with that business. You will likely get some gems right here. This is definitely a good way to spend your initial, exploratory time. At the right time, you will be able to start formal proceedings to buy a business and will be much more likely to succeed.

Richard Parker is the author of the How to Buy a Good Business at a Great Price series. As President and founder of Diomo Corporation – The Business Buyer Resource Center, his materials, seminars and consulting have helped thousands of business buyers realize their dream to buy a business.