Buying an existing business

[Shouldibuy]

Have namechanged as a few know me in rl on here, and I'd rather keep this to myself for now, but just looking to see if anyone has bought another business over, and if so, what to think about.

Background is - I work from home with a small business which I've had for around three years, and is now making a profit (fairly small just now but growing). Dc3 is still very small (few months), and my plan was always to wait till they were at least at nursery aged 3 before stepping up a gear.

I got a letter in July 2011 about a business in my field being sold. I was fairly interested at the time but was pg so didnt take it any further. I came across the letter this week and decied to email just to see if it was still for sale and it is.

I am going to see it on Monday (a shop is involved) and won't see the accounts till after that. Most of my questions would be around the accounts, as they are mostly just selling the stock, so I am trying to come up with a definite list of what I need to look at on Monday, before I see the accounts.

Was hoping somebody elses had done something similar and could pass on some advice. I have looked online and will do a lot of thinking and speaking to Business Gateway etc if I am interestedm but its just this first step that I am looking for advice on?

Do you know why the current owners are selling? That will give you a bit of an idea as to the shop's history. Find out if you are tied to a lease - too long and it'll be difficult to get out of, but too short isn't great either as they could kick you out without much notice.

The accounts are crucial, make sure you understand them or get someone who does, and go through them with a fine toothcomb. Ask as many questions as you can - if sales were down or particularly high one year ask why.

Check whether you can keep the current business name or whether you can change it. Find out about staff (if it has any, what terms they are on) as staff costs can often wipe out any profit.

Can't just think of anything else but good luck! I'd love to buy a business, too scared at the moment

Thanks roller - they say its to concentrate on other businesses that they have which could mean lots of things. Havent seen the accounts yet but they say it was more profitable when they were hands on, but its currently being run by a manager, and not doing quite as well as before.

The lease is till 2016.

I will definitely take time with the accounts, but they come after the viewing tomorrow, so I guess the main thing is to not rush into anything, and ask lots of questions. Then seek more advice.

Sounds like you've got it under control, yes definitely don't rush into anything.

My problem is that I'd be great actually running a business - I've worked in finance for loads of different companies so know how to set up and 'run' businesses no problem. But I don't have any specialist knowledge about particular types of business so I'd be rubbish at selling and I'd have to employ a manager and rely on them. I'd love to own a children's nursery (work for a big group atm) and could run the accounts side easily but I don't know enough about the childcare side so would have to do some serious retraining and rely on someone else to 'manage' it which takes it out of your hands somewhat.

Did you say it's a shop you're looking at? Will you manage it yourself? Do you know if it has any other staff? Good luck with it all, let me know how you get on.

How did your viewing go?

Well it was interesting. The shop's location is good - not much competition in a central big town /small city. Apart from that, the stock was a bit rubbish. I make the main item that was for sale, but the same item can be made more cheaply, and his shop was fll of the cheap version - not appealing to me personally, although I understand there is a market for the cheap version too.

But basically, there was nothing in the shop that I couldn't buy or make for myself, and the accounts were only so-so, so assessing all the options, I think either a sop in a location closer to home would be better in the end, but for the moment, I will stick with working from home.

It's such a difficult decision to know when is the right time to take a big steo forward. I made a very small profit last year, then this year have been on maternity leave for a bit, so I think I will keep things ticking over until e youngest ds is just a little older, and then get some proper advice on expanding from business gateway.

Sorry for bad english - ipad typing is not great, and I was feeding the lo, so not enough hands to go back and correct.

Meant to say roller - think I am the opposite of you - I can make a product that there is a market for, but selling it is a whole other side to the business. I'm not sure I know anything about running a business, and seem to be always feeling my way forward slowly - but I guess it's all a learning curve, so maybe working from home is a good place to start to get systems in place etc, before getting into the legalities of a lease etc.

That's great. At least the visit has shown you future options. Keeping costs low by being at home might not be abad idea in this Market.
Good luck with it