Buying an existing shop can avoid some of the ornery tasks associated with starting a shop from scratch. If the existing shop is in good shape, you won’t need to hire a planner, architect or construction firm. You won’t need to select and install all new equipment (but you should only make this determination after a third party evaluates the equipment!). You may even be able to get away with not wearing the interior designer hat. You’ll gain an existing name and, most likely, existing staff. You’ll have the opportunity to build on what works and improve what doesn’t, while enjoying an already existing cash flow.

Conversely, buying an existing shop can be more expensive than starting from scratch. There is also risk associated with taking on an existing name, existing staff, and existing problems. If the coffee shop doesn’t have a good reputation, you’ll need to work harder to change that perception than you would if you opened a brand new shop. Any changes you want to make may be met with resistance by staff and loyal customers. You may find that beneath all that shiny chrome, your shop is held together with duct tape.

The website www.Business.gov, a site administered by a number of federal agencies, recommends that you get expert help before buying an existing business. Hire an attorney to review legal and organizational documents, and hire an accountant to evaluate the financial condition of the business. Be sure to investigate any obligations, fees and renewal options if the deal involves taking on an existing lease.

The website also recommends that you assess all manner of business documents, including, but not limited to:

• Financial statements from the past 3-5 years
• Tax returns from the past 3-5 years
• Customer lists
• Sales records
• Contracts
• Inventory receipts/lists
• Payroll, benefits, and employee pension/profit sharing info
• Employee list
• Certifications by federal, state and local organizations

Although it goes without saying, make sure that there are no liens or lawsuits filed against the business.