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How to diagnose a business?

Posted On : Jan-17-2012 | seen (962) times | Article Word Count : 433 |

If you want to buy a business rather than building your own business from the start, it is always recommended to first diagnose that existing business for the best of the future plans and your expectations
Phase for anyone wishing to buy a store, the diagnosis of a business requires discipline and precision. This preliminary step allows to thoroughly checking all items that will determine the success of your project.

Assess the location
The location of a business is the key to success. Is it located on an axis of strong passage, in a shopping street or in a tourist area? Its facade is visible? Can benefit from carrying signs nearby? Is it easily accessible on foot, by car or public transport? The environment may be changing: check with the planning department of the municipality, if development projects are under study (new traffic plan, site urban renewal) to determine to what extent they may affect the activity of trade. Refer to the Traders Association: its representatives are often better able to gauge the vitality of the neighborhood.

Observe competition
The development of your business depends on the presence or not of competitors, but also the eventual implementation of new entrants or the creation of a commercial area. Try to determine if there will be room for everyone. You can also analyze the balance sheets of your competitors practicing under statute LLC. Their income statements are available on the internet with free sites that specialize in the company information. The unions are a source of relevant information. They usually have to research on market conditions and outlook for their industry.

Estimate the personality of the seller
You must identify the role played by the vendor in the running of his shop. His personality can often take a central role in the success of his business through his customers, he knows personally? If so, you must ask yourself whether you will have the breadth and going to replace it. You can provide the seller with a transitional period during which he will accompany you and introduce you to suppliers and customers.

Assessing the health status of the store
You should study carefully the evolution of the turnover of trade, the latest balance sheets and income statements (the seller is required to provide these accounting). The review shall assess whether the case has already reached its maximum turnover, if it is growing or is declining. In three cases, it is to find the origin of the situation to estimate the potential for business development and to consider actions to be implemented upon its acquisition.

Note: beyond the accounting, consider also the commercial lease (remaining duration, renewal, and rent reviews) and the various contracts taken up the business (contracts of employment of employees, insurance, equipment rental ...).

Article Source : to diagnose a business?_134659.aspx

Author Resource :
Author have good knowledge about six sigma training, ISO, automation and core tools training to enhance business productivity and recommends OHSAS 18001 Training as an initiative for building expertise in ISO standards.

Keywords : Business diagnosis, business valuation, business strategy, business development,

Category : Business : Ethics

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