- Have I accurately ascertained why the seller desires to sell?
- What should be in the non-disclosure agreement and/or letter of intent?
- What difference will it make if stock or membership units are purchased instead of assets?
- Have I properly analyzed the prior balance sheets and income statements, including gross profit margins, net income or loss margins, year-to-year sales and expenses?
- How do I determine if the company has the assets and sales reflected on the financial statements?
- What assets exist that are not reflected on the balance sheet and what assets are on the balance sheet that are not worth the stated book value?
- Are all taxes current including payroll, income, sales (including purchase price sales taxes), and property taxes?
- Is there any potential litigation or are there any disputes with vendors, customers or employees?
- Are there any “unanticipated” declines in sales around the corner?
- How do I find out if any problems exist with the land, buildings, or leases?
- Is the existing workforce stable and how will they react with a new owner?
- Are there any key employees who must be “sold” with the business and retained?
- Are there any problems with the contracts I am purchasing; are they assumable?
- See the Checklist for Starting a New Business for applicable items.