• Ask for financial records. Look into obtaining documents such as tax returns, loan amounts, building leases, etc. This is will give you a good idea of how the business has been run; strengths and weakness, etc. If the business seller is unwilling to give this information, then you may want to consider terminating your offer to buy.
• Talk with present owners, and others you feel will help you. Talk with owners that are now selling. How has business been? Have they met sales expectations? Has the franchise held up to their end of promises (trainings, technical assistance, etc)? Speaking with others such as lawyers and accountants is also a good idea, as they will be able to review finances, and legal documents.
• Think of a list of questions and ask them. Consider why the business is for sale. Are there repairs that need to be made? Equipment that needs fixing? Make sure you do your homework. Assess business records, and be certain that you will be able to successfully manage the business. No question is too trivial.

Don'ts

• Don't forget to have a business plan. And I don't mean a business plan in your head. While that is important, you must also develop a business plan on paper; a budget. How, what and where you plan to invest the money; Financial projections; how you plan to get the money to purchase the business. Things like this will be the backbone of your business. Knowing where you are going, will help you get there.


• Don't purchase your business without enough capital. Nobody wants to be in need of more money after purchasing a new business. Be sure you take everything into consideration and plan for maximum expenses.


• Don't depend on current relationships of the business. You can assume that certain relationships have been established with the previous owner, but do not expect those same relationships to continue. It might be wise to talk with the seller about those relationships before you actually buy.


• Don't jump into the first business you see. Unfortunately there are some individuals out there that will take advantage of those who are looking to buy a small or home based business. Don't fall into the trap of getting scammed. Be sure the business is legitimate.

While this may be the tip of the ice-berg in what you should know about buying a small or home business, it will get you on your way. Remember that there are numerous resources for helping make sure that you know all you need to know before purchasing the business, so use them.