North Carolina residents who would like to work for themselves can either launch a new commercial venture, buy a franchise or purchase an existing business. All of these options have their drawbacks. Starting a business from scratch is the riskiest approach and obtaining startup financing can be difficult. Buying a franchise is less risky, but quality franchises are usually expensive and franchise operators do not have the same freedom as entrepreneurs who are not bound to a corporate master. Purchasing an existing business may seem like the safest choice, but even this approach is not without risk.
The first question prospective entrepreneurs should ask in this situation is why is the business for sale? Commercial ventures are sometimes put on the market because their owners are retiring or moving to another part of the country, but they may be available because they are struggling or a serious problem is looming on the horizon. Thorough due diligence can get to the bottom of this question and it should not be overlooked.
Entrepreneurs should also be honest about their strengths and shortcomings and whether or not they mesh well with the business for sale. They should also look at businesses that are capable of generating enough profits to maintain their lifestyles. Entrepreneurs who have lived comfortably may find the allure of self-employment fades quickly when a business is not bringing in enough money to pay the bills.
Attorneys with experience in acquiring businesses may suggest calling in a forensic accountant when the records provided by the seller paint an overly rosy picture. Once tax returns and financial statements have been reviewed, attorneys could help clients to determine whether or not the asking price is fair. Attorneys could also look into legal issues such as license or permit problems and lawsuit exposure.