Because so much must be considered when either buying a business or starting a new business, the safest way to approach the situation is to create detailed checklists for every stage and every requirement that needs to be fulfilled, before you finally sign on the dotted line and agree the terms of the sale.
During a business purchase, the legal team dealing with the purchase agreement will create their own checklists to cover all the legal issues and eventualities. Similarly, you should also create separate checklists for all other aspects of the sale to ensure that nothing is missed.
One of the easiest ways to decide on what checklists you need to draw up is to split them into three types:
information that needs to be discovered (i.e. questions regarding accounts);
documents that need to be produced prior to sale; and
conditions that must be met prior to sale.
If you are starting your own business, the checklists will differ slightly and are more likely to cover the following issues:
marketing and advertising preparation;
getting in place the necessary documentation, contracts and registrations;
arranging staff; and
purchasing equipment and premises.
As well as creating the basic checklists, it is also a good idea to calculate the time required for each element of the checklists. This way, you can ensure that you begin with the items that are going to take the longest time to achieve, thus preventing any unnecessary delay and making sure that you minimise the time that expensive professionals dedicate to your venture.
A popular way of drawing up checklists is to work backwards from the date of expected opening or transfer. List the final requirements first, for example, signing of documents and continue backwards until you have listed all items on the checklist. This approach gives you a realistic project timetable to follow, as well as confirming whether or not your projected completion date is realistic; it also gives you a good idea of when you need to mobilise the various different stages of the project.
Buying or starting a business requires a great deal of organisation and checklists are vital to ensure that nothing is missed out;
as well as creating checklists, consider how long it will take to complete every stage;
use the checklists to create an accurate project plan that can be followed throughout.