Once you have a list of potential business candidates, what is the next step to take...

Once you have a list of potential business candidates, what is the next step to take when considering buying a business and what are the questions to ask?

Expert Solution

When a businessman looks to buy another business, a number of factors must be considered before making the final buying decisions as the money involved is quite high and the associated risk is also paramount.

This process should start by identifying the various probable candidates of buying. Once a pool of probable businesses which could be purchased is made, then the next step of the buying process should be to research and investigate the company which has to be bought. The businessman must try to analyze the financial condition of the business. Apart from this, all the relevant information about the operations of the company must be collected. This will really help in finding and analyzing the future performance of the business under consideration. If the business is having the good financial condition and a string operational ground, it could be a nice buying for the businessman.

The main questions which can be asked are as below:-

What are the reasons for selling the business?

What are the location value and financial situation of the business under consideration?

How this purchase will be financed by the buying organization

Which mode of financing will be used i.e. self-financing, or lending from financial institutions, angel investors or venture capital

What will be the terms and conditions of sales agreement?

How long will it take to get the complete charge of the business?

keosha answered 1 year ago

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