Start by defining your target business. Assess your skills, financial resources and form a picture of the ideal target to acquire. Then enlist the help of a professional who specializes in business acquisitions.

Having an existing customer base and predictable cash flow gives you a strong advantage.

Sellers will offer any number of apparently legitimate reasons to explain the sale of their business. But it is worth asking anyway, and attempting to judge how comfortable the seller is in releasing information. Sometimes the seller wants to sell the business for a reason that should discourage you from buying (eg it's not making money!). Make sure an accountant looks at the business' accounts.

Usually a business that is a going concern is sold with a certain payment for "goodwill". This is the price the buyer pays for the business's "good name" that has been earned over the period of operation. An acquisition specialist can help you establish an appropriate figure for goodwill by examining the business's financial accounts.

Hire an experienced business acquisition lawyer. Ask for a checklist of all the documents you'll need to get from the seller. Your lawyer will review the purchase agreement and check the structure of the transaction. Also retain a competent accountant. Your accountant will perform due diligence - the process of determining if the documentation provided by the seller is accurate.

It's always a good idea to speak to an accountant and a lawyer, before you buy a business, and to enlist the help of an acquisition specialist. For instance, you may want to make sure the agreements are structured so that the seller cannot open another similar business just around the corner.

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