Five questions to ask when you are buying a business

1. Why is the business for sale? There are many reasons why an owner might want to sell a business. Make as many inquires as you need to ensure that you are not buying a lemon.
2. Is this a good industry? Think of the people who bought a camera shop just before digital cameras came on the market; or those who bought a shopfront music store just before digital music and the streaming platforms. Every industry has a lifecycle. Identify where the relevant industry sits in its lifecycle.
3. Have you done your due diligence on the business? The checklist is almost endless. Engage an accountant, a solicitor and an insurance broker to minimise the risk of overlooking vital checks.
4. Do you have a business plan? You will have your own methods of operating the business and it is unlikely that these will be the same as the current owner's methods. Your accountant will have a checklist which you can follow to develop the business plan. This checklist will ultimately be used to prepare the essential cashflow forecasts.
5. Do you have the necessary staff? Many businesses experience staff shortages in these days of low unemployment. Do not assume that the existing staff will stay with you. Meet with them. Have one-on-one conversations with key managers or employees 

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