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Bank Accounts: A list of all business accounts.

Asset List: Asset list of all real estate, equipment, tools and supplies including intangible assets like trademarks and licenses.

Real and Personal Property: Documents such as mortgages, deeds, leases, appraisals, loans and insurance policies.

Sales Records: You want the back up sales records that correlate with the financial records and tax returns.

Advertising and Promotions: Obtain copies of past and present advertising, brochures and Resources Directory ads.

Inventory Receipts: If you are purchasing inventory, check a list of inventory and examine ALL inventory to ensure it is still worthy of selling based on condition or product dating.

Supplier List: You want a list of all sources the owner uses to obtain supplies, tools, equipment and other vendors.

Employee Records: When you are going to employ existing employees you need their personnel files including any benefits information, payroll records etc.

Licenses and Permits: You need to have all certificates, permits and licenses issued by federal, state or local agencies.

You must evaluate your chances for successfully owning and managing the business you may decide to purchase. That means fully understanding how the business was setup and run until it became available for sale. Can you fulfill the management system running it now? Will the owner provide assistance including consultation assistance for a period of time after the sale is complete? Will the present owner really be able to persuade most of the existing clientele to stay with the business? Oh yes, does your contract of sale ensure that the seller won't open a competing new business in the same trade?

Is the price right? Get at least two certified commercial business appraisers to value the business. Their reports should tell you a great deal if the asking price is reasonable. Ask for the opinion of your accountant and lawyer too, and if you have successful business owners in your family, see what they say too. You are collecting information, and not necessarily confirming that everyone's assessment is correct. But swings in appraised value can be a sign of a problem.

You need to review the financial performance of the business to ensure that you can meet the monthly payments of a business purchased on a loan or note receivable as well as providing income to support your household. This process must be done for each of the new owners looking for income from the business.

Have you considered the costs of opening your own business in the selected area? Our Startup Costs Main Menu may be of some help. Our biggest concern for new grooming business owners is that one or more of the owners should be a full-charge, full-time groomer earning a steady wage for completing those services from the business. Please review the next section below for more information.

As you complete the investigation and compile the records you are likely to gain more insight on if the purchase of the business is for you. Unfortunately, it has been our experience that some pet grooming business owners are lax in maintaining well-organized documentation and if that is so, you are at risk. If you cannot investigate at minimum what has been mentioned here, and your lawyer and accountant are likely to require more, you may be at risk of buying a business and inheriting undiscovered problems. It does happen, be very careful.

Non-Groomers Purchasing a Grooming Business

Occasionally a new client of ours shares their desire to own a grooming business, yet not groom. Their desire is to be an owner/manager. Is it possible? Yes, but there are financial risks.

As a rule of thumb, an owner/groomer "putting down their clippers" to simply own and manage their business needs the net operating of a minimum of 3 full-time full-charge groomers to provide the now non-grooming owner with about the same paycheck previously earned when the owner was also a groomer. Only a large business can support 3 or more full-time groomers, but that is what it will take. If the business has other sources of revenue, such as a kennel operation or strong retail sales, then the dependency factor is lessened. What does this mean to a non-groomer purchasing a grooming business? If you are counting on a good paycheck from the grooming business your purchasing, and it doesn't have 3 or more full-time groomers working for you, you shouldn't count on too much of a paycheck if grooming is the main source of revenue. Yes, there are exceptions but you need to talk this over with a grooming consultant expert at this subject, and we actually teaches this rare knowledge in our workshops. There are so many variables here that we could fill this website, but the above mentioned caution is very serious.

If you are a non-groomer purchasing a grooming business, we favor the situation where two partners purchase the business, usually a husband/wife but not a requirement, where one grooms full-time and one manages full-time. That means the grooming partner is steadily earning a regular paycheck from grooming each working day. This strategy has always worked best for our clients. The managing partner MUST grow the business though, and we suggest using the knowledge in From Problems to Profits-The Madson Management System and the Grooming Business in a Box ® series of workbooks based on that book. Yes we do have partners working well together creating substantial businesses and net incomes where there is a full-time manager, a full-time groomer, and they add Madson Team Trimming, and bathing departments.

There are more concerns on the next page when you must consider the asking price for the business opportunity.