Heather K Adams
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A turnkey business for sale can be either a gem of a find or a disappointment. No matter what kind of operation you're eyeing up, here are the essential questions you need to ask when buying a business.

Financial questions to ask.

1. How much is this biz really worth?

A business can look solid at first glance. On paper. And it can seem super busy and popular. On a Saturday afternoon. But go in on a Tuesday morning, peek behind the scenes and look for the corners held up with duct tape before you make the leap to owner. In other words, give yourself time to become familiar with the pros and cons of a business before you invest your money or your time. Put the experience on par with buying a used car, and expect to find a few issues. And if you don't? Ask yourself if it's a scam. Because that can totally happen.

2. How much money do I really have to spend?

Because it's not just about the scratch you need to buy the business. You'll also have to cover all the expenses of running the joint until you start making a profit. This means paying utility bills, payroll, buying stock and merchandise... not to mention any unexpected repairs that will inevitably pop up. And that's just for the business itself. Don't forget you'll still need to get your own rent check in on time, too.

3. Can I see the financial statements?

You'll have to sign a confidentiality agreement, but if you're serious about purchasing a biz, you're definitely going to need to see the bottom line. Signing that agreement should grant you access to financial statements, tax returns and info on storefront leases and other contracts going back at least five years. Study these carefully, get a feel for the phases the biz has gone through, both highs and lows, and then sit down with the owner/s to review them. 

4. Have you had any legal issues?

Ask this especially when discussing the particular industry of this business. Different industries require their own licenses and certifications, and a biz that isn't quite above board can end up facing all kinds of legal concerns. From fines and fees to outright lawsuits (resolved or pending), failing to ask some legal-centric questions when buying a business can end with you biting off more than you'd ever want to chew.

Questions to ask the current owner/s

5. Why are you selling?

Sure, maybe it's a mom and pop diner that's been open for forty years, and the elderly owners are packing it in to travel the country in an RV. But maybe it's someone trying to make a quick buck off a sinking ship. Addressing why the owner is selling is one of the key questions to ask when buying a business. To go back to the used car analogy, pay as much attention to what isn't said as to what is. Buying a lemon of a car is one thing. Buying a bad business? Much stickier.

6. What have you learned?

Whether you're eyeing up that little diner or scoping out a big investment firm, getting to know the owner and their story is essential. Buy them a drink and ask them about themselves. Let the convo flow into the biz: why they started it, how it's grown and how it and they have changed. Don't go looking for dirt, but don't let any slide by you, either. You want to get an insight into the owner and their relationship with any biz you're seriously considering making your own. 

7. Can I job shadow someone?

You should have tons of additional questions that pop up: does the owner work in house and draw a salary? If the storefront is rented, what's the relationship with the landlord? What about daily operations? Job shadowing an employee for a few strategically-chosen shifts (think: the busiest, the slowest and the ones you have the most questions about) will give you that intimate window into the psyche of an establishment. Absolutely nothing gives you a better sense of the overall health of a biz than spending time on the ground and in the mix with folks who are there every day.

Questions to ask yourself.

8. Why do I want to own a business?

Perhaps the very first of all the questions to ask when buying a business: Am I ready to be an owner? After all, do you really know what's involved? This venture is going to need you to be there, day in and day out. Can you hang in under that kind of strain? If you're looking to buy a larger business, are you able (and willing!) to conduct the kind of puppet mastery necessary to manage multiple locations? Because being the owner means being a boss, all day, no matter how much you'd rather just stay home.

9. Why do I want to own this business?

Seeing that for-sale ad, looking at your financial situation and seeing a match is exciting! Yet beware "Ohh, shiny car!" syndrome. Beware of falling in love, or worse, lust, before you get a clear picture of what you're dealing with. Ask yourself if you want this biz because it's the right fit, the right time and the right situation — or does it just seem super cool and fun? Buying a business is a lot like getting married. Make sure you're doing it for the right reasons, with the right match.

10. How am I going to sell or close?

Because businesses aren't forever. You might have dreams of an empire, and sure, go ahead and dream big. But it doesn't hurt to acknowledge reality, which is the fact that life and circumstances change. Family issues arise, economies dip, burnout happens and retirement looms. Thinking about how you'll handle the biz while also dealing with life brings up some very important questions to ask when buying a business. You at least need an idea of how to close, how to sell and when to know the time might be right for either. Think of it as a kind of insurance policy.

One last thought.

Knowing what questions to ask when buying a business is essential to any new owner's success. It's no exaggeration to say that asking the wrong questions, not asking enough questions or just generally being uninformed is the quickest way to failure and possibly financial hell. Because businesses are tricky things. Done right, ownership can be one of the most fulfilling ventures of your life. Done poorly? The worst. So do your homework, ask good questions and put the answers to good use.

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