Buying a business is an opportunity you may want to pursue. There are things you should consider, though. Do you know if you can take over the business’s property lease? Are there expenses you will incur immediately, like ads or marketing campaigns that haven’t ended?
Knowing the right questions to ask can save you money, time and hassle when you make a purchase. You need to make your own letter of intent to discuss the terms of your purchase, which can help you point out all major purchase points in writing. The terms may not be binding, but they will help you work out any potential issues before you work with an attorney to create your final legal contracts.
Another thing you may not have considered is the potential for an acquisition to cause you legal trouble due to something the old owner did while he was in control of the business. You should discuss this potential situation before a purchase and make sure you receive indemnity. Indemnity protects you by requiring the past owner to defend any lawsuits or past decisions made before you purchased the business.
Remember, you will also need employees in many kinds of businesses, and if there are already employees at the business, you need to know if they want to stay (if you don’t want all new employees). They can be helpful, and you can create terms that require you receive time to meet with employees before the sale goes through. This can help you get a feel for how the company already works and if the employees want to continue to work there.
Our website has information on questions you may want to ask before and during the purchase of a new business. Consider all your options before moving forward. This is a decision you should make with all the facts.