For many entrepreneurs, the path to success lies in buying an existing business. “It’s a great option for an entrepreneurial-minded person because you’re simply taking over an operation that has customers and is hopefully generating cash flow and profits,” says Sarah Adams, VP small business for RBC. A lot of the difficulties in starting up a business has already been done, so it can be less risky.”
That being said, not every deal is a winner. You have to do your due diligence before you sign the deal.
Following is a quick a checklist for anyone considering buying a business:
- Ask to see a business plan. “Financials tell you a lot,” Adams says. “You can see how they started and built their company, and their overall financial situation.”
- Ask around in the marketplace to find out more about the company’s reputation. “You can do a lot of that online,” she notes.
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