If you're considering buying a business, read these bookkeeping tips to learn how to evaluate the financial health of a business before you buy.
Whether you are an entrepreneur looking for a potentially lucrative investment, are a pragmatist seeking a recession-proof source of income or have decided the current environment could offer the chance to get a good business at a low price, here's how to approach the process.
Ask the Right Questions
The first question to ask before buying an existing business is: Why is it for sale? This is not to suggest that any business available for purchase is inherently a risky investment. There are perfectly legitimate reasons for a business owner to sell out, from retirement, to health issues, to short-term financial stresses like the novel coronavirus outbreak.
But there are also times when a "For Sale" sign is a red flag. In order to determine which category a prospective business investment falls into, you need to probe further. You'll want to know: