How does one go about taking over an established business that isn't doing so well?

Question

How does one go about taking over an established business that isn't doing so well?

Answer 1

First, ask yourself if you can turn it around, unless you have a lot of income you need a loss to cover.

Second, ask yourself if you really know why it isn't doing so well, or are you just guessing.

If the business is a corporation, make sure all the required filings are up to date, get at least 3 years of corporate tax returns, including all supporting data (receipts, sales tax payments if required, employee records, especially withholding, etc.).

If not a legal entity, get the same info for the owner.

If there are appliances that need maintenance, get the maintenance and repair records. Check these against the tax records. If there any depreciated items, make sure you have all the records from when the item was purchased to the last tax return.

Have a lawyer draw up a purchase and sale agreement. Avoid "as is" unless you get it for $1. Do NOT purchase the business debt. Make sure the P & S and any sale document explicitly exclude existing debt, which will remain the seller's responsibility.

Be sure you acquire all rights, including good will and the name (if you're going to keep it).

Make sure you put in a requirement that the seller will NOT open a competitive business for X miles around and for Y years after the sale.

Sure you want to do this?

Answer 2

First you have to determine why it isn't doing so well and then determine whether you could change that if you took it over.

Answer 3

Talk to the owner.

Answer 4

Conduct some market research...

and otherwise sell the assets & start a brand new business

Answer 5

buy it