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Checking inventory before a business merger

On Behalf of | Oct 30, 2019 | Mergers & Acquisitions |

One of the reasons Florida entrepreneurs merge with or acquire another business is to gain access to a lucrative inventory. Even if gaining ownership of inventory is not your prime goal, checking out the inventory of the business you want to buy is important. Otherwise, you might find yourself with some unexpected problems stemming from your purchase.

Without an accurate assessment of how much inventory is owned by a business you wish to buy or merge with, you might run the risk of acquiring an operation with less inventory than you were hoping for. However, a business with too much inventory can also be a problem. Chron.com explains that excessive inventory can be stolen or damaged over time, which results in loss to your business.

Additional problems may result if you acquire a business without an accurate picture of what it possesses. You might believe you have certain items on hand, but when a client places an order, you find the inventory did not include them at all, leading to shipping delays and a frustrated customer who may poorly review your enterprise. Also, you might put in orders for items that you do not know you already have in stock, which can be a waste of money.

Some business owners plan to acquire the workforce of a business along with its inventory. If you want to have the existing employees of the company continue to handle the inventory, you might want to check out the inventory management of the other company. Entreupeuner.com explains that inventory workers should be professionally qualified to handle inventory. You should also know who is in charge of inventory management so that you know who to hold accountable.

These are important questions to tackle before a purchase or a merger, as you may not want to get involved with a business with poor inventory. You might also want to train or bring in new workers to straighten out your newly acquired inventory. Asking a business law attorney for assistance may also help, especially if you are unsure what kind of inventory records you require from the other business.


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