Looking for advice on acquiring an existing business (from a pirates perspective)

[guns68]

I have an opportunity to buy an existing business and I’m trying to look at this from the pirate perspective. Where I’m at right now, I have a galleon in sight I’m trying to place my ship for the tactical advantage. One of my look outs has spotted the sails of a small ship (flying the Spanish colors) intending on disrupting my attack. If this occurs this may delay (which may be an opportunity in itself) or thwart my plans. I’m looking for advice from you more seasoned raiders.
Ok, here it is in plain English. I am looking into buying a business. I’ve looked over the facility and inventory. The current owner has given an asking price and I’m now in the process of hiring a CPA to look over the books and inventory details before I make a counter offer. It has come to my attention that a part time employee is interested in the business as well. So what I’m interested in learning is how do you proceed when you are making preparations to board the Galleon and you spot the sails of another, not a ship of the line mind you, but a Spanish raider none the less.

[JDoza]

I haven't been in your position but for the fact that you are having a CPA check the books before before you make an offer is sound. This PT employee may have more of an emotional attachment to the business than anything else. Execute your plan. If the CPA finds nothing to be worried about, make an offer.

[fidalgoman]

You might want to add a Lawyer to the mix to make sure you get everything you think you will and that the owner doesn't go out the next day with his client list and you find you've just financed your biggest competition.

An old Russian proverb says "Trust, but verify".

[jesmith]

Make sure there is actually booty in the hold. For example: We buy from OST because we know we are going to get first rate gear at a fair price. Would we buy if Gabe wasn't running the show? Reputation is hard to buy and KEEP.

[guns68]

Thanks for the comments. Yes I plan on having a lawyer involved but thanks fir the reminder. Jesmith, you bring up some interesting points that got me to thinking. Booty in the hold, in this instance I am more interested in the ship itself than what's in the hold. The captain appears weary and his lack of charting a course is showing. The hull, and especially the sails and rigging are sound and she's making way inspite of the crew. If I take her over I can become a terror in this part of the ocean. The other point (and I would like to hear more from tribe members on this) that got me thinking is your comments on OST. I could not agree more with you that Gabe sells quality products at fair prices (at least it's been that way for the things I have bought) and the customer service has been fantastic! But, I do not buy from him in the strength of his personality. If he were to sell OST tomorrow and the new owner continued to offer what they offer for the same pricing, with the same customer service I would still buy from them. Am I out on a limb here? What say ye, and what comments do you have to overcome this possibility in my venture?

[baker]

1. Don't believe anything the current owner tells you.
2. The vast majority of small businesses do not have accurate books.
3. Look for downward sales trends. This would be a big reason people sell.
4. Are they reliant on one main customer, or just a few of them? They may know something you dont.
5. The most common small bus. sales scam goes like this: "sure I don't show much on the books, but I paid myself off the books. I paid off my house, boat, cars, ex-wife, etc."