Items to be checked

YES

NO

1.        Do I possess the required skillset to run this business?

2.        If not, will I be able to acquire the skillset?

3.        Is the owner’s reason for selling valid?

4.        Does the business have proper financial records? If yes, check the following

5.        State of financial position

6.        Are you buying tangible assets like equipment, vehicles etc and not just intangible assets like goodwill, patents, contracts etc?

7.        Are all the tangible assets unencumbered?

8.        If not, is the tangible asset situation favourable?

9.        Are the intangible assets, like goodwill & contracts etc, fairly priced?

10.    Debtors – Compare with the previous year. Does the debtors’ percentage remain constant in relation to turnover from previous years?

11.    Does the current owner have a dedicated person attending to the debtors’ accounts?

12.    Is there a longstanding relationship with the debtors?

13.    Creditors – Compare with the previous year. Does the creditors’ percentage remain constant in relation to turnover from previous years?

14.    Is there a longstanding relationship with the creditors?

15.    Income statement, is the business showing a profit?

16.    Is the ROI favourable?

17.    Is there a history of positive earnings and cash flow?

18.    Is the stock included in the sale?

19.    If not, do I have the funds to cover the stock?

20.    VAT returns, if registered for VAT?

21.    Tax returns?

22.    Are bank statements available?

23.    Is the rental lease transferable to a new owner?

24.    Will the staff remain within the businesses’ employment?

25.    Is the staff situation stable?

26.    Will the owner stick around for a couple of months to ensure smooth transformation and continuity?

27.    Was the owner transparent in presenting information?

28.    When taking all of the above into consideration, will I purchase this business?

29.    If the answer is NO, Reasons why?