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Buying1. It39。s a Dog2. Ill Will from Previous Owner3. Unsuitable Employees4. Poor Location5. Obsolete/Unusable Equipment6. Difficult to Change and Innovate7. Outdated Inventory8. Worthless Accounts Receivables9. Business Overpriced (Good Will)Small Business ManagementFinding a Business1. Advertisements2. Brokers3. Banks, Accountants4. Friends5. Look AroundSmall Business ManagementQuestions before Buying1. Why is Owner Selling?2. Physical Condition of the Business?3. Continued Market for Products/Services?4. Customer Base?5. Competition?Overhead 52Small Business ManagementScreening the DealsPreliminary: Visit, inspect, interview. Quicklook at marketing, finances, and inventory.Second Stage: Examine the value of the investment. Facilities Financial Ratios Ownership What are you buying? Capital Required Personnel Market NicheFinal Screen: Do a business plan.Small Business ManagementHOW MUCH IS IT WORTH?1. Book Value2. Replacement Value3. Liquidation Value4. Past Earnings5. Cash FlowSmall Business ManagementValuing AssetsIntangiblesImage and reputation with suppliers, customers,and banke