Your Experience in Buying an Existing Business

I have not done it and I would never do it without a full report from objective legal and tax counsel reviews off the business.

I would want ALL details regarding AR/AP and especially credit status. Do the owners plan to stay on board to keep consistancy? Sometimes an owner takes a salary to stay on board for a period of time to keep consistancy AND has a no compete contract involved for a period of time... 2-5 yrs or so.

I am sure it can be done and done well... I would be extremely picky about getting full disclosure of every detail... financial, forecasting, credit history, issues and how they were solved, etc.

Good luck if you do it.

check dave ramsey's website, he always suggests several steps when he gets a caller about it, but I have to admit I don't listen to those very closely as we're not in that boat.

My advice - no matter what have a contract lawyer or business lawyer look over all papers before you sign. My friends bought a home daycare business in another state and after 2 yrs she had lost money every month and had had issues with the state licensing rules being enforced wrongly. She closed and the former owner came back and said, ok, I get all the stuff in here, no matter if it was purchased after I left or not, PLUS you owe me the remainder of the money you owe me.

I guess that leads me to another advice - only get loans from banks, not other people

I have not personally, but my SIL did, and it was a mistake! She bought a bakery from a well-known, local pastry chef who had been one of her professors at culinary school. He even did some stints on Food Network shows. Because of his status, he was able to sell his very expensive, very fancy pastries and cakes at VERY high prices. He assured her that having been his student, and having learned all of his techniques, she would be able to keep the clientele and keep the price points as they were. She trusted him and followed his advice, and it didn't work out. He left them his customer database where they found out that half of his clients didn't reside in the town where the bakery was, but in Chicago. The locals weren't interested in very overpriced baked goods from a no-name chef. Business was dismal and they had to close six months after opening.

So, definitely research and get full disclosure as TF Plano below recommended!