franchise, small business and entrepreneur

1. PROCESS OF
EVALUATING AN
EXISTING BUSINESS
AHMAD RUSHAIDI B AZMI 62283113781
NURFARHANA BT AMINUDIN
62283113723
NUR HAFIZA BT AB HALIM 62283113541
FARAH AINI BT ZAINOL
62283214371
NUR INSYIRAH IZYAN BT NOORISHAM
62283113898
NOR HAZLINA BT KAMARUDDIN 62283313057

2. PROCESS OF EVALUATING AN
EXISTING BUSINESS
Why does the
owner want to
sell?
What is the
physical condition
of the business?
What is the
potential for the
company’s product
or services?
What legal
aspects should you
consider?
The business
financially sound?

3. WHY IS THE BUSINESS FOR SALE?
• Look for the real reason
• The owners feel boredom and burnout
• The owner decide to cash in their business
investment and diversify into other types of assets
• The buyer should be able to develop a clearer
picture of the business and its real value

4. WHAT IS THE PHYSICAL CONDITION
OF THE BUSINESS?
• Account receivable
• Lease arrangement
• Business records
• Intangible assets
• Location and appearance

5. WHAT IS THE POTENTIAL FOR THE
COMPANY’S PRODUCT OR SERVICES?
Customer
Characteristic And
Composition
• Discovering why
customers buy from
the business and
developing a profile
of the entire customer
base can help the
buyer identify a
company’s strength
and weaknesses
Competitor Analysis
• A potential buyer
must identify the
company’s direct
competition, those
businesses in the
immediate area that
sell similar products or
services

6. WHAT LEGAL ASPECT SHOULD YOU
CONSIDER?
• Business buyers must be
careful to avoid several
legal pitfalls as they
negotiable the final deal.
• The biggest potential
traps include liens, bulk
transfers, contract
assignments, covenants
not to compete, and
going legal liabilities.

7. What is it LIENS?
The proper transfer of good title from seller to
buyer
What is it BULK TRANSFER?
To protect against surprise claims from seller’s
creditor after purchasing a business.
What is it CONTRACT ASSIGNMENTS?
A buyer must investigate the right and the
obligation he would assume under existing
contract with suppliers, customers, employees,
lessors, and others.

8. •Generally by signing a
covenant not to compete, an
employee agrees that if she
leaves the employer, she will
not go to work for the
employer's direct competitors.
•Covenants not to compete
are also known as "non-compete
clauses."
COVENANTS
NOT TO
COMPLETE
• These typically arise from three
sources;
•Physical premises
• Product liabilities claims
• Labor relation
ONGOING
LEGAL
LIABILITIES

9. THE BUSINESS FINANCIALLY SOUND?
• How to assess the strengths and weaknesses of potential
business options including any responsibilities or liabilities
you will inherit from the previous owner.
• Why the current owner is selling and how that may
influence your decision to buy.
• The additional costs that will be incurred if you decide to
buy the business
• How and when to consult with existing employees about
your future plans.
• What Transfer of Undertakings and Protection of
Employment (TUPE) Regulations are and how they might
affect your future plans.
• What due diligence entails and where to get assistance to
manage the process.
• The conditions of sale and all your contractual
responsibilities