Are you considering buying a business? Do you have a vision of being your own boss and calling your own shots? If so, that’s great; however, before you move forward with this purchase, there are several things you need to consider.

Before diving into business ownership, be sure to ask the questions listed here to ensure you are making the right decision.

What Are the Business’s Biggest Challenges Right Now?

Before getting into a new business venture, you need to be aware of all the possible minefields you may encounter. For example, if you plan to purchase a company that requires $1 million in capital improvements, you need to know this upfront so you can negotiate the purchase price.

What Would the Current Owners Have Done Differently?

This is a question that can encourage the current owner to talk about the opportunities they failed to pursue or that they would have liked to pursue. It will help you learn the amount of growth potential that the business owners – from additional product lines to untapped markets and even new marketing opportunities.

How Did the Seller Come Up with Their Asking Price?

There are many situations where a seller is going to base their price on arbitrary factors, such as the amount of money they require to move on with their life. Be sure you ask about the quantitative information they have that can back up the price they have requested. You want to be able to understand their thought process and get a better sense of how much bargaining power you have. If the seller arrived at the price arbitrarily, there is probably more room for negotiation.

If the Owner Can’t Sell, what will They Do Instead?

Finding out what the business owners plans are if they are unable to sell their business is another smart way to figure out what type of bargaining power you have. For example, if the owner would be willing to give the business to a worker or if they would close it over time if they were unable to sell, you probably have more wiggle room to get a lower price for the purchase.

How Are You Going to Document the Business Financials?

You need to ensure that there is a clear paper trail for all financial data for a business. Make sure the current owner will provide you with access to the tax returns and any other documents that will be able to back up the assertations made by the owner regarding the losses, profits, income sources, and revenue. If the seller has any type of unrecorded income, what do they have to prove this in writing?

If you want to ensure that you make the right decision when you are buying a business, it is a good idea to use the services of a business broker. This is going to help ensure that you get the right business for the right price.