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TIPS FOR A FAMILY LOOKING TO BUY A BUSINESS

Dear Joyce: Family members have recently immigrated to this country. They are talking about not starting a business but buying one. What advice do you have for them? -- N.M.

A: Smart move. To get the lay of this land, my first stop would be at a large library to read past issues of such small business magazines as Entrepreneur and Inc.

Your relatives are spot on in their aim to buy a going business rather than starting from zero where they don't know the playing field. Don't forget to check newspaper business opportunity ads.

For anyone, here are some tips:

* Choose a company right for you. For some people, buying a business is a bread-and-butter proposition: money and security and that's it.

But others want more. Recently several Hawaiian firefighters were interviewed on a TV travel show. They work 20 hours a week at the firehouse, spending the remainder of the week in their own business teaching tourists to surf.

As one firefighter/surfing business owner explained: "Ever since I was a kid I've wanted to drive a fire truck and have always loved the ocean. How can life be better?"

If you don't know where to start to find your version of a firefighting/surfing paradise, try this simple technique:

Read a business telephone directory page by page. Use a color marker to put a check mark beside any business that interests you. Then eliminate businesses until you have only five or six high-interest possibilities to research.

Uncertain of your choice? Ask to work and observe inside the target business for a week or two, using the experience to validate your interest and skills to operate it. If the seller's not hiding something, your request will be granted.

* Remember that brokers work for sellers, not buyers. Just as most real estate brokers are paid by and legally owe their primary allegiance to sellers, business brokers generally are also attached at the wallet to sellers.

You don't need a broker to buy a business -- it's just easier and like the "hidden job market" there's a hidden "businessfor- sale market" that brokers know about. Find a broker near you on the Web site of the International Business Brokers Association, ibba.org.

* Check and check again. A business may or may not be in the profit condition represented by the seller or broker. Believe nothing that you have not verified by research or common sense.

Speak to bankers, insurance agents, people who may be potential customers. Call out-of-area competitors to find out about the health of the industry. Interview the company's neighbors to find out any stray but useful information -- such as the landlord is raising the rent, there will be an assessment for a new roof, or a big box store is in the wings (check the city planning department for building permits issued).

If you're buying a retail store, are similar businesses doing robust business? Is the parking adequate? Did a plant closing turn Main Street into a ghost town?

And the red flag of all factors? When the seller tells you that not all income is reported, that there's much more under the table. That's 10-foot-pole territory.

A book: "How to Buy a Business," by Richard A. Joseph, et al (Dearborn Trade).

Check the free business articles on businessbookpress.com.

* Correctly value the company. Many resources -- free online articles and buying- a-business books -- tell you how to value a business so you don't buy trouble. If hundreds of thousands of dollars are involved, it makes sense to find an accredited business appraiser. Read the free articles on bizben.com.

A book: "Business Valuation Bluebook," by Chad Simmons (Facts on Demand Press).

* Consider seller financing. If you can't get the money elsewhere at a cheaper interest rate, ask the seller to carry the loan. The collateral may be the business.

E-mail career questions Joyce Lain Kennedy at jlk@sunfeatures.com; use "Reader Question" for subject line. Or mail her at Box 368, Cardiff, CA 92007.

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