buying a small business

[Schneed10]

Originally Posted by Mattyk72

There's a small local business for sale in my area and I'm interested in looking at it. My question is, when buying a business is it possible to request to see their financial statements prior to buying??

Yes, for sure. Without the financial statements and projections, you have no idea what you're buying and what it's worth.

You'd especially need to see the balance sheet in order to determine how much debt the company is in (and how much you'd have to assume).

I'd think small businesses wouldn't have huge debt, maybe a mortgage or a small business loan. But you're also going to need to know what the other fixed expenses are (lease payments for rent of property, maintenance contracts for maintaining any equipment, stuff like that). Gotta know how much cash will have to be flowing in.

If you ask for the financials and they tell you to go to hell, then you don't want ANY part of that business anyway.