Premises, location, equipment… what to look for before taking over a business

Published on : 22 October 20213 min reading time
Operating a business is a better way of doing business. To do this, you can directly create your own business, or choose to invest in an existing business and take it over. This second option is quite advantageous, but it is also risky. Therefore, before taking over a business, it would be better to carefully analyze the factors of success of the investment.

The importance of the location and the clientele

In commercial operations, the location plays an important role. Not only must your store be visible to attract customers, but the type of business you operate must also be appropriate to the location. This will be difficult to achieve if the business is built within a building or a fence. On the contrary, it could only be beneficial if the business is located in a crowded or even lively area. Similarly, it obviously won’t work if a culinary operation, such as a restaurant, is located near a landfill or recycling plant. And of course, the environment is also a consideration. Will people in the surrounding area be interested in your project?

What about the premises?

When taking over a business, it is essential to specify that the building is not an integral part of the sale agreement. Otherwise, if no real estate purchase negotiations take place, the new buyer of the business will have to lease the premises or continue the lease of the seller. Therefore, the lease contract must be analyzed by the buyer, so that he can judge whether the terms of it are suitable or not. But also, the state of the premises must be seen, to avoid bad surprises. Does it meet the standards? Does it need to be renovated? And above all, would the premises allow you to change your business in the future; or is it subject to specific destinations?

The quality of the equipment and the stock

The materials and equipment as well as the stock are, indeed, included in the acquisition of the business; hence the usefulness of analyzing whether they are in good condition or whether a precise budget still needs to be prepared for improvement. But an inventory of the equipment is also advisable before signing the takeover, because often only part of it belongs to the seller. As for the stock, it is better to make sure that it is not yet expired or destroyed.