Instead of starting a business from scratch, it is sometimes advisable to buy an existing business. Buying an existing business eliminates many of the hassles of starting a business. However, certain considerations are important in buying a business. You need to conduct proper due diligence to make sure you are buying what you think you are buying. Also important is to make a proper valuation of the business so you are not paying more than you should.

For more information on this topic, see the links listed below of articles posted on related Web sites.

Basics of Buying a Business

• Buying a Business - Small Business Notes -- Starting a business from scratch may seem overwhelming, so buying an existing business is often a viable alternative.
• Buying a Business - NOLO Law for All – Thinking about purchasing an existing business? Here are some things you should know before you take the plunge.
• Buying or Selling a Business: The Process – Lawyers.com -- While no two deals are ever the same, the purchase and sale of a business will typically fall into one of three categories.
• Buying or Selling a Business: The Basics – Lawyers.com -- If you're buying or selling a business, the deal will almost always be structured either as an acquisition (through an asset purchase or a stock purchase) or as a merger.
• Buying or Selling a Business - Allbusiness.com -- A series of articles on buying and selling a business.
• Buying or Selling a Business - Lawyers.com. -- A series of articles on buying and selling a business.

Checking Out the Business

• What Does the Term Due Diligence Mean in Buying a Business - Allbusiness.com -- The term "due diligence" is synonymous with "background check."

Establishing Business Value

• Business Valuation – Small Business Notes -- There are many reasons you may need to know the value of your business -- if you are considering buying a business, a merger or outright sale, for tax or loan purposes, or for estate planning. Whatever the reason for needing to know this information, trying to come up with a valid figure can be a major effort and challenge.
• Business Valuation Techniques – Business.com -- Analytical approaches to valuing a firm, including cash flow, economic value added, ratio comparison and valuing equity as an option.
• Valuation of Small Businesses – CCH Business Owner’s Toolkit -- The value of a typical small business should be greater than the total values of its hard assets.
• Valuation Rules of Thumb – BizBuySell -- What's a biz worth? Gain insight on business valuation rules of thumb and why we use them.
• Choosing an Appraiser – BizBuySell -- Find out about the types of appraisers and how to pick the right one for your situation.
• Business Valuation – Merfeld and Schine Inc. – Business valuation is a mix of art and science.
• Enhancing the Value of your Business – Merfeld and Schine Inc. -- The value of just about any business can be enhanced through some fairly easy steps. Also by making these adjustments to prepare your company for sale, you will make the process go more quickly and smoothly.
• Internal Revenue Service Business Valuation Guidelines – IRS.
• How to Use Transactional Databases for Mergers & Acquisitions – Business Valuation Resources – The idea behind using transactional databases is to relate the price paid in other transactions in the industry to the respective company’s underlying financial data.
• Make Sure the Price is Right – BusinessWeek.com – If you value your business …. Value your business.
• Business Valuation – LawInfo.com -- Enter your cash flow information, your cost of capital and your growth rate to determine your business NPV valuation.
• Business Valuation Terms – Business Valuation Resources.
  

Buying a Franchise

• Ten Questions to Ask before Buying a Franchise - Allbusiness.com -- When you buy a franchise, you're putting big dollars on the line -- and your success doesn't entirely depend upon you.
•  A Consumers Guide to Buying a Franchise - Federal Trade Commission -- This publication will help you understand your obligations as a franchise owner, how to shop for franchise opportunities and how to ask the right questions before you invest.