You can avoid most of the big mistakes in buying a business by doing some simple homework beforehand.
A little due diligence will go a long way towards ensuring your business purchase is a wise and fruitful one. When the time comes for you to sell, you will have a business of value.
1. Take a good look at the strengths and weaknesses, opportunities and threats of the franchise. Do a SWOT analysis. Take particular note of why the franchise exists and ask; “Will continue to exist in ten years time? Will you be able to continue to do the things necessary to keep the franchise relevant in today’s business environment.”
2. Buy a franchise with a track record. Five years is preferred, three is a minimum requirement. Track record gives you a history and sales trend.
3. Buy a franchise that has image, brand & reputation. Consider how much money it takes to build a brand.
4. Ensure that the franchise has registered all relevant designs, patents and trademarks. Often Intellectual Property is the chief asset a business has to sell.
5. Investigate the quality of the products and services delivered by the franchise. It is often too hard to turn around a franchise dogged by faulty products or bad service.
6. Ensure that supplier contracts are in place and in writing where possible.
7. Be careful that the franchise is not reliant on one supplier. What if the supplier stops supply or closes down? The same applies to the basket of clients. A good spread is safer in each case.
8. The lease must be of sufficient length and contain reasonable terms. Is the property available for sale?
9. Investigate the reason for sale. The most genuine reason for sale is retirement.
10. Investigate whether there are any key employees and what you will do to ensure they stay on, if required.
11. Does the franchise have a good credit rating? An unhealthy credit rating is a sign of poor franchise performance.
12. How well is the franchise systemised? Good systems ensure the risk in taking over the franchise is reduced. Is computerisation completed? The question for the buyer is “How much will it take to complete the systemisation of the franchise?”
13. Check key ratios in the franchise. Are there marked changes from year to year? e.g. Does gross profit or net profit change considerably from year to year? Are stock levels consistent? If not ,why not? Compare the franchise year to year and then with industry averages.
14. Ensure you have enough working capital to get you through the whole year and beyond. Most businesses fail because they run out of money. How much working capital does the current owner need?
15. Make an accurate assessment of the competition. Where is the company strong and why? What are the competitive threats?
16. Stock can be a killer. Beware of a franchise that carries a lot of stock. Is the stock all “good and saleable”?
17. Check equipment for its durability. Is the equipment up to date? Will you need to make replacements in the near future? What will that cost?
18. Check all the local gossip. Speak to people in the vicinity of the franchise to find out any rumours or changes in circumstances that could be the motivator for the franchise sale.
19. Ask yourself whether you could operate the franchise. Envisage yourself being in the place of the owner. Is the owner personally involved in the franchise to the detriment of the franchise itself? Will all the goodwill you are paying for leave the franchise with the vendor? How can you insure against this? Will the vendor allow you to defer payment or pay on performance? Will the vendor consider vendor finance?
20. Don’t let emotion cloud your judgment. And remember there’s always another franchise around the corner.
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copy/paste?
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http://www.buyafranchise.com.au/buyerbeware.html 这里有
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谢谢ls提醒，我不是给网站做广告的，所以没注出处，大家看了有用就好
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thats handy!
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thank you
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