Subscribe to Entrepreneur for $5
Subscribe

An Acquired Taste

Before you buy that business, don't just give it a once-over--put it under the microscope.

This story appears in the May 2003 issue of Entrepreneur. Subscribe »

Are you considering buying an existing business? Whether you use a business broker or go it alone, you will definitely want to put together an "acquisition team"--your banker, accountant and attorney--to help you. These advisors are essential to what is called "due diligence," which means reviewing and verifying all the relevant information about the business you are considering.

The preliminary analysis starts with some basic questions. Why is this business for sale? What is the general perception of the industry and the particular business, and what is the outlook for the future? Does-or can-the business control enough market share to stay profitable? Are the needed raw materials in abundant supply? How have the company's product or service lines changed over time?

4th of July Subscription Sale - Unlock this subscriber exclusive article and more for 20% off today.

Access all Entrepreneur content with no ads, unlock discounts, and get exclusive advice only available to our subscribers. Plus, our magazine delivered straight to your door.

Get 20% off an annual subscription today. Just use code SAVE20 at checkout.

Entrepreneur Editors' Picks