Article Summary: 7 questions to ask before buying a business | CNBC

Kayleigh Kulp, Tuesday, 24 May 2016 | 10:00 AM ET

Source: RazzleDazzle Barbershop.

• Now is a great time to buy an existing business. You can capitalize on a loyal customer base, trained staff and the opportunity for increasing cash flow in this post-recession environment.
• Purchases of small businesses are among their highest levels since BizBuySell.com and BizQuest.com, which together feature 76,000 listings for sale, began tracking them in 2007.
• Median revenue of sold businesses on BizBuySell in 2015 also grew to $449,462, up from $417,562 in 2014, while the median sales price also increased 7.6 percent to $199,000.

Whether becoming a first-time business owner or acquiring a business to expand your current company, ask the following questions before signing on the dotted line:

1. Will demand exist for the business' products and services for years to come?  Make sure the business is profitable, has a competitive advantage and is not a fad.

2. Are there holes in the financials?  Due diligence should include a thorough review of bank statements, profit & loss statements, contracts, lease agreements and tax returns.

3. Am I just in this for the money?  Think long-term.

4. Do I really want to do this all day?  Business ownership isn't a passive investment.  You will need to be present to ensure success.

Source: Brandi Simons

5. What is the best way to finance this?  SBA loans and seller financing are the commonly used options.

6. Why is the seller selling?  Ask the seller what they would do differently if they stayed on.

7. Is the company's success tied to the owner?  If yes, you may want to keep the owner on to ensure successful handoff of clients.

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For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at Eric@EdisonAvenue.com or 239.738.6227. Also, visit our Edison Avenue website at www.EdisonAvenue.com or my personal website at www.BuySellFLbiz.com.