Buying a business in trouble
How do I go about purchasing a business that is known to have lots of problems?
First, the short answer: either stay away from this one and start a new business on your own; or, buy just the company's assets that you can use.
For example, you might consider buying:
1. The Tradename (if it has not been tarnished in the marketplace).
2. The Client List/Accounts (if any are left and they have no claims against the company).
3. The Equipment (but exercise caution here, because a troubled company usually does not adequately maintain its equipment, and there might be financial liens against these assets).
Often, buying a business in trouble can be a great opportunity. The answer depends on how much - and what kind - of trouble it's in.
Remember, when purchasing any business, it's often good to to purchase assets, not stock. Get your attorney and CPA to help you understand this distinction.
Brain Trust contributor:
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