5 Key Questions To Ask Before You Buy a Boat Business

Buying a boat is a big commitment of time and money that requires a good number of hours of brainstorming and research to make sure you are making the right move. So imagine what it takes to buy a boat business? Buying a stand alone business or even a franchise is often done so because they are a boater and the industry appeals to them in one way or another.

Still, potential business owners must do their homework in asking a multitude of questions before taking over a boat business.

Here are 5 key questions to ask before you buy one.

What to other business owners say? If the owner wanted to get out of the industry due to dissatisfaction, find out exactly what the problem was and determine whether it is an issue, or issues, you want to take on. If this is a franchise, take a look at franchise associations and forums to see what owners are saying about the challenges of running the business.

Check into whether there has been a big turnover rate. You can easily find this information in a Franchise Disclosure Document (FDD) that can be handed to you by the owner or broker of the business you are looking to buy. The document will be able to tell you how many times the business has changed hands and when. As with any business, if there has been a large number of transitions, that points to a chronic problem you may not be able to fix or overcome.

Do your research in figuring out the failure rate. When buying a business or particularly a franchise, you need to know whether there has been a problem with the franchisee or the franchisor. One point to consider is the fact that no matter who is to blame, when the percentage of closures is high, it should be considered a red flag.

You also need to do research on why franchises fail. What might be more important than overall failure rate is knowing exactly why the franchises have failed in the past. Tracking down former owners to find out what exactly happened to their businesses would be a helpful to make your decision.

Find out what percent of the business chain is franchised. In some franchise operations, a small number of units are used almost like a business guinea pig to try out new managerial ideas and other things. All of the other businesses can be franchise-owned. Check to see if the parent company maintains many units but with only a few franchisees. Again, this might turn out to be a red flag when it comes to franchisee support.