Two businesses with the same asking price may call for very different checks. Regulation, customers, employees and seasonality vary by industry. A sector-specific checklist is therefore more useful than a generic price comparison.
Practical example
In a hair salon, customers may be loyal to particular stylists rather than the brand: retention is not guaranteed by the purchase.
What to check before moving forward
Customer concentration
Examine customer mix and reliance on a few major accounts. High revenue can be fragile if it depends on a single contract or the outgoing owner's personal relationships.
People and employment obligations
Understand who performs critical tasks, what know-how sits with employees and what happens after ownership changes. Review contracts, costs and possible employment obligations with specialists.
The commercial lease
Read the commercial lease before assuming the premises can be used on unchanged terms. Term, rent, deposits, assignment provisions and permitted uses need review under the contract and applicable law.
Equipment and assets
Check ownership, condition and realistic value of equipment, property and other assets. Separate operationally essential items from extras, and investigate liens or financing arrangements.
Licences and permits
Identify licences, notifications and permits required for the activity and premises. Do not assume they transfer automatically; check with the relevant authority.
How to use this guide
Start by requesting sources for each important claim and noting what remains unverified. Cross-check answers against records, visit the operation where appropriate and bring material risks to an adviser before committing. Never fill missing financial figures with your own assumptions.
Evidence worth requesting before you proceed
A sales description is a starting point, not proof. These documents help distinguish verifiable facts from expectations:
- Lease agreement and addenda
- Workforce, payroll costs and employment terms
- Recurring contracts and customer churn
Request information appropriate to the negotiation stage and respect confidentiality arrangements. Sensitive documents may be shared only after a buyer is identified.
Final takeaway
A sound transaction starts by defining what changes hands, checking the facts and documenting the agreement. Use this guide as a map of questions, not a replacement for a review tailored to the actual business.
General information only; not personalised legal, tax or financial advice. Rules depend on the transaction and may change.