Entrepreneurs and “would-be” entrepreneurs are a lot more cautious than they used to be about buying an existing business.  Most admit that they’d rather wait and miss an opportunity than buy a business that is unproven or overvalued.  As a business consultant and broker, I am often asked to weigh in about the key considerations when buying a business in Colorado.  In this risk-averse business climate, it is more important than ever to thoroughly evaluate a business that is for sale before making an offer.

The three key considerations when buying a business in Colorado include:

1. Employees – look at the current staff at the company and try to meet with them to ask them some important questions. Are they critical of the business? Have they developed strong relationships with customers?  How much has the current owner contributed to the overall success of the business? 
2. Customers – As any business owner will admit, a company is only as valuable as its customer base.  It takes a long time to build up a loyal client base, but a very short time to lose them. Find out how satisfied the customers are with the current owners.
3. Facilities – No matter where your business is located, a lease must be examined carefully to determine how it may impact the value of the business.  Find out if the current owner will guarantee the lease and whether the landlords will expect you to guarantee them as well.  Be sure to find out how recent environmental laws in Colorado will impact the business, especially if the company’s activities create hazardous waste.

Of course, there are dozens of other important considerations when buying a business in Colorado, including financial statements, receivables, valuation, competitors and inventories, but these are often evaluated by a professional business consultant or accountant.  Visit an online business FSBO directory for more advice on buying an existing business, as well as a list of businesses for sale in Colorado.