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 garage may display lifts and tools, but check their maintenance, ownership, environmental obligations and operating permissions.
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.
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.
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.
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.
Debts and liabilities
Distinguish liabilities that remain within a company from those that may arise in an asset or business transfer. Contractual risk allocation does not automatically extinguish legal duties owed to third parties.
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:
- Maintenance history and deferred investment
- Environmental permits and waste-management records
- List of equipment, assets and encumbrances
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.