The whole category in one page.
THE CENTRAL RISK IS THAT THE SELLER KNOWS MORE THAN YOU DO
Everything else follows from it. Establish why they are really selling, and verify that reason independently rather than accepting what you are told.
YOU ARE PAYING FOR FUTURE PROFITS, SO ASK WHAT SURVIVES THE OWNER LEAVING
Value that depends on the departing owner's relationships is not value you can buy. Test it by asking what happens when they are away for a month.
RECONCILE REPORTED REVENUE TO BANK RECEIPTS AND TAX RETURNS, BECAUSE BANK STATEMENTS ARE THE HARDEST RECORD TO MANIPULATE
Never pay for income that cannot be documented.
ADJUST PROFIT FOR A MARKET SALARY FOR THE OWNER'S ROLE, SINCE PROFIT THAT ASSUMES AN UNPAID OWNER IS NOT PROFIT
CHECK WHICH CONTRACTS TERMINATE ON A CHANGE OF CONTROL, AND SECURE LANDLORD AND COUNTERPARTY CONSENTS BEFORE COMMITTING
BUDGET WORKING CAPITAL SEPARATELY FROM THE PURCHASE PRICE — SPENDING EVERYTHING ON THE PURCHASE IS THE COMMONEST WAY BUYERS FAIL AFTERWARDS
READ THE DISCLOSURE DOCUMENT CLOSELY, BECAUSE ANYTHING DISCLOSED CANNOT LATER BE CLAIMED FOR
TRANSFER EVERY ACCOUNT, DOMAIN AND SYSTEM CREDENTIAL AT COMPLETION, SINCE BUSINESSES ARE ROUTINELY HANDED OVER WITH THE SELLER STILL IN CONTROL
TELL STAFF AND MAJOR CUSTOMERS PERSONALLY AND FIRST, BEFORE COMPETITORS REACH THEM — THEY WILL, AND QUICKLY
AND BE GENUINELY PREPARED TO WALK AWAY, BECAUSE IT IS THE ONLY REAL NEGOTIATING POSITION AND BUYERS WHO CANNOT ARE EXPLOITED
