Unless you've already put a lot of thought into making an acquisition, you could cut a bad deal and put your small business into jeopardy. People who advise business owners on buying and selling companies recommend a lot of soul-searching before any big transaction is undertaken. You really need to be careful about what you're buying. To begin with, you need to ask yourself if it makes good business sense to be buying a company at all. Even after you've decided an acquisition is really right for your company, be sure that this is the right acquisition.
Due diligence means looking at the company's books and tax returns going back several years.
Get some help from a lawyer who has handled other business acquisitions. It's also a good idea to do some research about the buying and selling process before you even get started - there are books and Internet sites with plenty of information. You might also want to consult a business broker, although you should be prepared to pay a fee for the service. Even with the assistance of a professional on the financial and legal aspects of an acquisition, you really need to be honest with yourself about the company you're seeking, its strengths and weaknesses, and how well it will fit with your existing business. We have compiled a list of agencies and resources that contains useful information for entrepreneurs.