Before spending thousands on legal fees, ask the "Three Whys":
Review at least 3 years of tax returns, P&L statements, and balance sheets. Watch out for "owner add-backs" (personal expenses run through the business). buying into an existing business
Buying into an existing business is a high-stakes shortcut to entrepreneurship. You skip the "startup struggle," but you inherit the previous owner's history—both good and bad. 1. Identify Your Entry Point Before spending thousands on legal fees, ask the
Businesses are usually valued as a multiple of or EBITDA . You skip the "startup struggle," but you inherit
You buy a percentage (e.g., 20% or 49%) and work alongside the founder. This requires strong interpersonal chemistry.
A common path for US buyers, often requiring only 10% down.
Check for upcoming lease expirations, new competitors, or changing regulations. 4. Due Diligence (The Deep Dive)