If the start of a new year finds you thinking of buying a retail store, you’re in luck. The North American Retail Hardware Association provides 15 tips. The first five were published here on Friday. The next five are:
6. Records: Do current records show clearly and completely the former operations of the business? Do you understand and can you operate a bookkeeping system? Do you need an accountant? Do you have a business forecast, budget and analysis of receivables and payables? Do you have current and projected sales, profits and cash flow? Are you holding the seller personally responsible for the accuracy of the records?
7. Purchase/lease: Do you have an attorney to review the purchase contract and lease, if one is involved? If the facility is leased, will the landlord allow a sublease? Are there any liens against the property or business? Will the landlord accept a non-compete clause in the contract?
8. Inventory: Is it in salable condition? How much of it is tied up in slow-moving or obsolete items that would have to be liquidated? What is the turnover rate?
9. Equipment: How old are the sales floor fixtures and other types of equipment? What condition are they in? Can they be used as is? What needs to be upgraded or replaced?
10. Appraisal: Do you have your own appraisal of real property included in the sale? Of store fixtures and equipment? How does it compare with the seller’s demands?
Next time: The final five tips.