I've purchased 2 existing businesses...some thoughts
Hello,
I've purchased two coffee shops, and evaluated another 20-30 that have been for sale over the past 3 years. After pouring over each of their book keeping systems, tax records, sales figures etc., I'd say that the single most important place to start is the business checking account because those numbers don't lie. All others, including tax returns, are subject to all kinds of manipulation, but a business bank account showing daily deposits and monthly expenditures is a solid place to start.
And remember, it's just that - a start. All of the other fundamentals need to be there (great location, reasonable lease, any reason they did something that you can't duplicate, like having their children/elderly parents work for next to nothing in the afternoons etc.)
Hope that helps,
*allen
PS - I disagree with the comment that "turning around a bad shop is more difficult that building a new shop from scratch". It all depends on what made the existing business "bad."