Buying a small business is something that must be done with care, because if it is not, as commercial lawyers will tell you, the legal and financial ramifications can be dire. Many a lifetime’s worth of savings has been lost by someone trying to short cut all the due diligence and other checks, only to find themselves left with massive liabilities, and a business that is not what it seemed.

Of course, there are many positives to buying a business, rather than starting one from scratch. These obviously include the fact that the infrastructure is there to allow you to trade immediately, and there is already a level of cash flow. You are also able to take advantage of the fact that the business has an existing client base.

However, all of these can only occur if the process you go through ensures that you have covered yourself against any issues or losses. Do not let the excitement of owning the business cloud your judgement or lower your guard with regards to being caught out.

Obviously, employing a commercial lawyer to help oversee the purchase of the business and to ensure that all the legal elements are correct, including the purchase contract, is certainly going to make a huge difference. Beyond that, there are also several other steps you can take to protect yourself, and one of them is to look out for the following red flags.

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