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
A rural guesthouse may have significant property value, yet the right to operate tourist accommodation must be verified separately.
What to check before moving forward
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.
Seasonal trading
Study at least a full annual cycle where trading is seasonal. Compare peak and quiet months, temporary staff, rent, inventory and off-season liquidity needs.
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.
Assessing the location
Assess actual footfall, accessibility, nearby competition, visibility and possible planning changes. A location that looks attractive in photos may still underperform.
Actual cash flow
Analyse actual cash receipts and payments, collection periods, suppliers and reinvestment needs. Attractive accounting profits do not guarantee enough liquidity to service debt and keep trading.
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:
- Tourism registrations and operating conditions
- Current operating licences and permits
- Lease agreement and addenda
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.