Some of the things you should find out before buying an established business are:

• Why is the business for sale?
• How old is the business and how long has it been operating profitably?  (Tax records will show details)
• The amount and value of stock, the accuracy of the books, any liabilities or  limitations in the lease, etc.
• The comments of customers, suppliers and existing staff.
• The opinion of an attorney, bank manager and accountant
• The overall outlook for the particular industry
• The vendor's strong personal attributes or relationships which benefited the  business and which you might not possess.

Anything else that may make the business a bad buy such as:

• Advancing technology
• A new freeway outside the front door

Advantages:

• There is no start-up period. You could have adequate cashflow from the start, if you bought wisely.
• Many crucial decisions have already been made and there are financial records to tell you whether those decisions have been good ones.

Disadvantages:

• You are investing a large sum of capital immediately.
• You will need to check very carefully that the amount you pay for goodwill is  justified; assess how important the previous owner was to the business; and if the business will suffer during changeover period.
• You will need to look carefully at the amount you pay for stock. Many businesses accumulate old stock which can be virtually unsaleable.