Buying a business? Better do your homework
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Getting the information you need
Obviously, you have to ask a lot of questions. But, "ask the questions in a nice way," says Fox. Get to know the owner. "If they lie in little things, they'll lie in big things," he says. One important question: If the business is so great, why are you selling? Or why aren't you selling to a family member or friend?

And don't forget to talk to ex-employees, he says. Another rich source of information: suppliers. "They know how they pay, how they deal with people, how organized they are," Fox says.

"Talk to customers," says Fox. "They will tell you everything." Ask: "How many times have you referred this business to someone else?"

Ask how the business makes money. "You will be astonished, if you ask that question at different levels of the company, the different answers" you receive, Fox says.

You also want to look at the numbers for at least the last five years, he says.

Some of the things you want to know:

• The number of customers. • The number of sales per customer. • The price per unit.

Ask, "At my price, will I have enough customers?" Fox says.

Compare your business to industry norms, says Weaver. You can use references like Dun & Bradstreet or data from the Department of Commerce. What is the average profit margin in the industry? What are the current trends?

Is it a good fit for you?
Finally, you need to determine if the business is right for you. Are you still in love with the idea? Does this feel like something you would enjoy doing every day? Would you do it even if you weren't getting paid?

Look at "what the opportunity requires you to give up," says Weaver. If you weren't doing this, what else would you be doing? How would you enjoy that, and what would it pay?

Good questions to ask current owners:

• "What are the hidden land mines?" says Fox. "What are you afraid to tell me, that if I were to own, I'd learn the first day?" • "If you were my age and you were starting the business where it is today, what are one or two or three thing you'd do immediately that you don't feel like doing now?" says Fox.

A good business opportunity is never do-or-die. You also want a built-in exit strategy in case you change your mind, decide you don't like the business or you need to get out.

Business opportunities are one area of life where it pays to be suspicious. "Question everything, document everything, do as much homework as you can," says Lesonsky.

"It's fraught with land mines," she says. "There are a lot of people who have succeeded at this. But you have to do your due diligence to make sure you're one of them. It's in your hands."