Buying an Existing Business Demands Thorough Analysis

By Porter, Sylvia | THE JOURNAL RECORD, July 14, 1988 | Go to article overview

Buying an Existing Business Demands Thorough Analysis


Porter, Sylvia, THE JOURNAL RECORD


Although Doug was tired of being an accountant, at age 63 he was not yet ready to retire. So when a client named Fred, owner of Freddy's Frame Shop Inc., announced he was selling his business and moving to Florida, Doug was ready to pounce on this opportunity of a lifetime.

Or so he thought.

``What is there to know about picture frames?'' Doug reasoned, completely ignoring the fact that Fred's upscale clientele purchased his frames because of his exquisite taste and fine reputation. Doug, on the other hand, couldn't match his suit and tie in the morning.

Doug's enthusiasm was overwhelming his logic and, if it hadn't been for the good advice of an expert on buying businesses, he would soon have found himself courting disaster.

It's a rare American who doesn't dream, at least occasionally, of owning his or her own business. And in fact, of existing businesses in the U.S., about one in five changes hands every year. These companies range in size from the corner car wash to major corporations.

Initially, purchasing an existing business may seem much simpler than starting from scratch. But in reality, your analysis must be just as thorough when taking over a business as when starting up a new venture. Nothing should be taken for granted.

For instance, if it's a retail business like Freddy's Frameshop Inc., location is key - and location often depends on the terms of a lease. How many years are left in the lease? If it's only a few, how high can the rent soar? Can the lease be assigned to Doug immediately or must a landlord approve the transaction?

If the company is organized as a corporation, who really owns the assets? For instance, Fred's name may be on the lease rather than the name of the business Doug is interested in buying. The computer Fred uses to catalogue all frames and prices may be his personal property, and not included in the sale of the business.

``Make the seller sign a document transferring all business-related assets to the company,'' says Mark Shenkman, a New York City attorney. The reason: To ensure you're buying all the necessary assets to keep that business running.

These are examples of the hundreds of questions that require answers when considering the purchase of a business. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Buying an Existing Business Demands Thorough Analysis
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.