Purchasing an existing garage, stay alert.

Determine what is actually being sold

The first question is whether you are acquiring a business or a collection of assets, and this answer alters nearly everything that follows.

A business purchase includes customers, staff, contracts, and liabilities. An asset purchase includes equipment and possibly a lease, leaving everything else behind. Sellers often describe one while meaning the other, and the price only makes sense once it’s clear which is being offered.

This distinction also determines what due diligence is necessary. When buying assets, you mainly need to check condition and title. When buying a business, you must understand the revenue sources and the obligations that come with it.

Revenue needs structure, not just a figure

A turnover figure reveals little about its sustainability for next year.

• What percentage comes from repeat customers versus one-off jobs.
• Is any single account a significant portion, and is it contracted or informal?
• To what extent does the business rely on the departing owner's personal involvement, which often disappears?
• The balance between desirable work and jobs you'd turn down.
• Is the recent trend stable, and what accounts for any recent gains?

That point warrants caution. A business for sale often shows inflated final-year figures, so it's crucial to determine if this is sustainable or due to neglected upkeep and a marketing boost.

Prioritise premises and lease above all.

A workshop's value is based on its earnings, and an unfavourable lease can render it unviable.

Examine the remaining lease term, review process, assignability, any dilapidations liability, and planning status for your intended use. A short, insecure lease is a vastly different investment than a long one, regardless of the accounts.

If the property is owned, the same attention to condition is needed, as issues like a roof or drainage problem in an industrial unit can be costly.

Engage with the team thoughtfully.

The team is typically the biggest asset you're acquiring and the most likely to depart.

In many areas, employees transfer with the business and their terms, protecting them and creating a liability for you. Identify key staff, their pay, any informal promises, and if they know about the sale.

This point is sensitive; agree with the seller on how and when to manage it. A team that hears a rumour will start searching, and losing the senior technician early can negate your reason for buying.

Identify deferred costs.

Every business for sale has them, often clear to those who look closely.

Equipment nearing end of life, overdue calibration, a building needing repairs, outdated software contracts, unkept waste and compliance paperwork, and maintenance delayed to improve accounts. None are reasons to avoid buying; all are reasons to negotiate price or timing.

The practical approach is to list these costs rather than argue impressions. A schedule of first-year tasks with figures is a negotiating tool, not a complaint.

Plan the first ninety days pre-signing.

The handover period determines if you retain what you paid for.

Customers are loyal to individuals as much as to brands, so a departing owner who introduces you over weeks is worth negotiating for. Retaining the name, phone number, and routines initially costs nothing and avoids the impression of change.

The changes you want can wait six months. Implementing them in week two, before grasping existing practices, often leads to acquisition issues.