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. In The Idiot's Guide to Buying and Selling a Business , Paulson lists a series of questions for business owners to consider before even thinking about an acquisition, including what's right and wrong with their own companies and what must be done to improve any deficiencies. 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. You also might 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. So you might find that the best course of action is to do nothing, to walk away from what looks like the deal of a lifetime. The company you already own might be better off.