Jean L. Serio

Buying someone else's business (biz opp) may seem the easy route to take. The business is organized, up and running, with a steady stream sales. Plus, it's producing a profit. The learning curve isn't steep, so you can jump in and take over, seemingly, without a worry. With all the biz opps out there, you may have recently discovered what you believe is the perfect business. Before you take that pen and write out that check, wait up!

While the offer a seller presents may seem perfect, there may be underlying reasons, you won't be privy to, why the business is being sold. Serious reasons the owner keeps from you and anyone else interested in buying their business. Reasons - that once you've learned - might change your mind. And cause you to walk away.

Today it's not uncommon for an owner to sell simply to get out from under the stress they've created, the bad decisions they've made, for example. Or they're selling the business and leaving the area - relocating and taking all the customers with them.

To be safe, never take what a seller says as "gospel". You could wind up buying the business and struggling to get yourself financially free of the problems they created, and had the good fortune to sell to you. You'll hope this isn't the case.

On the other hand, there are dozens of good reasons to buy a ready-made business. However there are questions you should, and must, ask a seller; investigating you should do; review of any financial and other business information you're provided. And a consultation - or two - with your lawyer and accountant, before you take the leap and buy that business.

Once you purchase that business, you own it. Everything concerning that business becomes your responsibility and/or liability, unless you have a signed contract with everything spelled out. So it's important to have an attorney to help you through the process.

To help prevent taking over insurmountable problems which may have you closing the business soon after you've purchased it, here are:

10 Questions To Ask a Business Seller

1. How long has this company been in business?

2. Will you be required to buy the building it's in, or able to take over their current commercial lease? How long is the lease. How much is the monthly lease payment? Who's the leasholder? When was the last time the monthly lease payment was increased?

3. Is the business included in the price of the building? If not, what's the business price without the building?

4. Does the business price include all business assets, including equipment, merchandise, displays, vehicles, for example? Is the "customer mailing list" included in the price of the business? (Always get a list of everything you're purchasing.)

5. What's the approximate amount of sales to be made? Expenses to be paid? Ask for a breakdown? And ask for a copy of the most current audited financial statement?

6. Will all employees stay on? If not, who leaves? What's the current payroll expense; the amount of payroll taxes?

7. Are there any outstanding debts to be repaid? What are they and the amounts? Which outstanding debts are you expected to pay? Which are the seller intending to pay? Are there any on-going lawsuits, or leins, on the company? If so, what's the status; and ask for all info concerning these situations.

8. Are there any customer, employee, or long term, problems to be dealt with? What are they? What's been done? What further action did they plan to take to bring these scenarios to a close?

9. Does this business deal include keeping the seller on as a "paid" consultant? What's her fee? What does it include? (Make sure to get a breakdown)

10. Has the seller sold other similar businesses? What are they? Ask for the names and numbers of those people. Be sure to call and check them out.

Basic Business Opportunity Info

The rules for buying a "business opportunity" are few.

For instance, unlike a franchise, the seller isn't required to provide a disclosure document, which includes the financial information - including the price and what's included, as well as other pertinent information. Without a disclosure document, you have no basis for a lawsuit, if you don't get what you believe you paid for.

A quick story. A business acquaintence purchased a sub shop from someone she knew. It was a busy shop on a highly traveled thoroughfare. The price, and what it included seemed fair; the employees willing to stay; expenses in line; sales and profits rising annually. The seller provided lots of documentation.

Within six months, the new owner clearly knew the business was making only half the sales stated; expenses were much higher than stated. And worse, there were several large, outstanding bills she would be required to pay. Fortunately, she was able to secure a loan. With that and some serious control of expenses, she was able to turn the business around and sell it three years later. Making a nice profit.

While it doesn't always happen this way, it can. Be optimistic when you consider biz opps; but not blindly optimistic.

6 Things To Help You Get Off On the Right Foot Legally:

* When you receive documentation from a biz opp seller, investigate it all, or have your lawyer or accountant check it out.

* Call or visit business neighgors and casually start up a conversation about the business and the seller.

* If possible, do a credit and background check on the seller. You can also get some info from vendors they buy from and other business contacts.

* Talk to current and old employees. They may provide a wealth of information.

* If you can't afford a full-scale background check, check court and/or county records for leins and other legal info.

There are many solid business opportunities out there. Whichever you chose must be thoroughly investigated and reviewed in order to know exactly what you're getting. And you must get clear, and in writing, whose responsibility it is for any unpaid debts. If you don't have one, hire an experienced business attorney to get the information you need. And have your CPA review and check any, and all, financial information.

One Last Suggestion:

Ask the seller if they've registered this business offering with any state agency. If so which one? Have your lawyer check it out since the fact it's registered may provide you a legal leg to stand on if the business you wound up with isn't the one you agreed to buy.

While you don't want to miss out on a good business opportunity, it's better to take the time to investigate and get all the facts, before committing your hard earned money - and life - to a business you know little, or nothing, about. Remember, it's always better to be safe than sorry. Especially when it comes to an investment of this magnitude.

Jean L. Serio, Copyright 2006. Are you one of the 1.2 million women tired of working the 9-5 grind, sick of worrying about making ends meet? As you know, starting your own business remains one of the best strategies for providing you financial freedom. Discover how to start your own business, today, with your own step-by-step Action Plan. Plus to ensure you receive all the details FREE, and learn how you can harness the power and resources you need to start, first sign up for your Free Newsletter "Start Up a Business Today" and receive your Bonus Report "5 Mistakes Women Make Starting Up A Biz". "We help you make it happen!"

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