Don't Overlook These 3 Important Facets When Evaluating a Business

When you're considering purchasing a business, it's easy to get caught up in the excitement and overlook some important facets that could come back to bite you later. In this blog post, an expert business brokerage will look at three often overlooked areas that you should be sure to evaluate before making an offer on a business. 

Employee Retirement Plans 

If the business you're considering buying has employees, then it's highly likely they have some retirement plan in place. It's important to find out what kind of retirement plan it is and how much it will cost you as the new owner to maintain. When looking to buy a business, make sure you understand the regulations surrounding those employee retirement accounts. In addition, the prior owner may not have kept the plans updated with the Department of Labor. If the government were to discover any issues shortly after you take charge, you could get into legal trouble. 

Legal Paperwork 

When evaluating a business, it's important to take a close look at all the legal paperwork involved. This includes things like the lease agreement (if the business is renting space), any contracts with suppliers or customers, consulting agreements, and any intellectual property rights that may be in place. Be sure to have an attorney look over all the legal documents before making an offer on the business so that you know exactly what you're getting yourself into. 

W-2s and 1099s 

Another important thing to look at when evaluating a business is its financials. You'll want to request copies of all W-2s and 1099s for the past few years, and how they were distributed. The last thing you want to deal with is the IRS, and properly filing and distributing these forms is necessary to avoid any issues in the future. 

When you're considering purchasing an existing business, it's important to take a close look at all aspects of the deal—including some often overlooked areas like employee retirement plans, legal paperwork, and W-2s and 1099s. By taking the time to evaluate all aspects of the deal, you can be sure that you're getting yourself into a solid investment that will pay off for years to come.  

 

If you are looking to buy or sell a business in the Mobile area, the team at TNT Business Brokers can help make your process as smooth and stress-free possible. With our experience in Mobile and the surrounding area, we can help you find the fit for you and your business’s needs. 

  

TNT Business Brokers 
853 Dauphin St. 
Suite C 
Mobile, AL 36602 
(251) 298-5868 
https://dynamitebrokers.com/