The decision to buy or not to buy a business has been pondered upon and now you have come to your final decision.  Want to review one last checklist?

Buying a business aka a business acquisition, is not a decision to be taken lightly as it can be a monumental investment of funds.  This decision must be pursued and explored with careful planning and thought along with detailed research.  Results of your research can reveal the strengths and weaknesses with the business candidate.

A business acquisition will require information and detailed answers for any questions that will, can or may arise, from the board of directors, stockholders, accountants, professional advisors, etc.  Once the information is in hand and the qualities of a business is revealed then one will be able to make their evaluations and final decision.

Common questions that should be considered prior to purchasing  a business are as follows;

– Self-Examination, examine your own business strengths and weaknesses or risk developing a flawed criteria and poor purchase decision.

– Strategic Plan, review your strategic plan and long term goals. It will evolve with the company, industry and overall economic environment. Is there ability to diversify?

– Price, Financial Terms, how much can you afford to pay? what resources will you use for financing? how much value will the purchase create in the eyes of the lender? what is the current net worth, credit history? liabilities?

– Earnings, what are the earnings from the past? will current trends meet or degrade earning potential? what is the true discretionary earnings?

– Qualities, what specific qualities must be part of the new business? can it integrate with current products? or be changed for a new product? will it complement existing business?

– Industry/Type of business, looking for a similar or diverse business?

– Sales and Profit, a business with small volume and high sales? Or higher sales than your own business?

– Financial strength, are there undervalued assets available in the new business? extra inventories for use as collateral for further or future financing? How much pre-sale purchasing power can you accept or achieve?

– Geography, what location is preferable? is, or will this be, the only location? will a future goal materialize only within a specific area? what target market is available to this area?

– Unions, will a change of ownership affect a existing labor union? can renegotiation with existing conflicts, be healed ?

– Marketing, are you looking to increase market share? hoping to capture a new market? diversify your market? expand market research?

– Competition, who will be your competitors? are they new or established? are they losing or gaining market share? can you offer better?

– Distribution Network, will your distribution network increase? will your network and new business complement each other? can you decrease costs?

– Property and Equipment, can you liquidate idle property? liquidate equipment for a business acquisition loan? what is condition of equipment? is equipment paid and owned by business candidate?

– Patents, Trademarks and Technology, will you acquire existing trademarks or patents and technology? will you increase pricing for this purchase? will it increase your market share? will the technology improve your own products? what are the benefits?

– Liabilities, how will your product liability insurance be affected? will new regulations affect your industry? will there be difficulty in meeting compliance issues with new regulations?

The preparation in advance and practicing business due diligence for a business acquisition will provide you with keener insight and ability to meet or realign projected financial goals. Today’s business acquisition loans may seem to be difficult to achieve due to stringent policies and current poor economy but not entirely impossible.

Reviewing and evaluating all your options and gathering research information will provide you with the tools to get creative in generating new financial resources and alternatives. Take the plunge and investigate the possibilities of that business up for sale and able to start with your nearest business brokerage firm or business broker .Read related –> here and there.

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Article(C)2009 Dame Scribe, all rights reserved. Dame Scribe creates articles and posts online. She creates articles on business skills & development, health, science, technology and society and has a strong passion for writing.