It’s definitely a good idea to do your homework before purchasing an existing business—especially one in the food industry. You can obtain an incredible wealth of knowledge by discussing the business with the one person who has been where you will be. While there are numerous questions you can ask (some really great ones have already been indicated in previous answers) here are a few that I would put at the top of your list.
- If you could start over, what would you have done differently? I promise you, there isn’t a business owner alive that didn’t learn from a mistake or a challenge in the early days of their operation. Whether it’s how they handled employees, recipes they put on the menu, or even how they interact with customers—there is something that the current business owner wishes they would have done (or maybe not done) to make their business more of a success.
- What do you think is the hardest thing about running this business? Business is definitely not for the faint of heart. Each business has it’s own set of challenges that may be something you can change, or something you have to learn to manage effectively. Learning what the previous owner felt was the hardest part about the job could potentially help you create a better strategy.
- What is the future plan of your current employees? This is something that gets overlooked a lot. You need to know if employees are aware of the sale of the business and if they plan on (or if you plan on them) sticking around. If they are already searching for other employment, you’ll have to come up with a plan for future employment. Likewise, if they plan on staying, you’ll need to understand current employee policies and whether or not you want to change them.
- Did you keep a thorough financial record? You need to know this business inside and out. If the current owner failed to properly document the financial information, you could be in a world of trouble. Be sure that the record not only exists, but that it is also complete.
- What are your business procedures? Small businesses are notorious for skimping on this incredibly important detail. But, it’s worth a shot to see if there are any policies in place so you can evaluate whether or not you want to keep them or establish new ones (or perhaps a mixture of both).
- What kind of rapport do you have with customers? The customer relationship is incredibly important. Small details about interactions with customers can make or break whether or not people continue to be regular patrons. For example, is it customary for the owner to chat with customers regularly? Are customers used to being given a mint after their meal? Simple gestures can be a big deal to some people.
There is much, much more you could ask the current owner about the functions of their business. This just gives you an idea of where you can start. It’s definitely valuable that you are thinking ahead to having a discussion with the owner—it shows proper planning. To continue down the path of planning, another good idea would be to consult a business attorney. They can help you weed through the details of the business and establish new policies if needed.
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