Buying a business is a major step for a North Carolina entrepreneur. That’s why buyers should be fully informed before making such a purchase.
For starters, buyers should ask the seller why they are selling their business. While this may seem inappropriate and abrupt, the question can be asked tactfully. How this question is answered could affect the entrepreneur’s decision to buy the property and how much they are willing to pay for it.
It is also a good idea for interested buyers to ask sellers if they are willing to show the last three years of their financials. These numbers can help potential buyers to project their future earnings in the business. If sellers refuse to show the information, it may be an indication that their business was not successful.
Potential business buyers might also want to ask who is in charge of making major business decisions. Otherwise, they may waste time trying to get answers from those who do not have this authority. Interested buyers may want to ask the seller about the industry’s trends and challenges as well. How sellers answer this question will show how much they know about the current marketplace.
Considering the fact that 80 percent of small business owners in the U.S. are seller financed, buyers should not be afraid to ask sellers if they would finance part of the purchase price. Sellers may offer better terms than a bank loan as well.
Those wishing to purchase a business may not always foresee legal issues, such as liens against the company’s assets, formal complaints made against the company or title problems. However, an attorney could perform due diligence to uncover such issues.