Has anyone bought an established business?

My dh (and consequently, myself) have been thinking about buying a business. We're not sure about building one from scratch, or buying an established one. My dh is a mechanic, and is currently working for someone who wants to retire (in the next 10yrs, so it's not like a urgent decision). The guy wants to sell his business, and he and dh have been discussing it for ages. The business has an excellent reputation, just mention the name of the company and ppl (mainly in the motoring world) know who they are. But the guy wants to retire the name.

Dh is (more than) a little worried that with the name go the customers. The business is a specialised one, mainly for english cars - both classic and new. Dh really only wants the newer side, as it has more customers (I was at a loss for words then).

Is there anything we should think about, before really considering this? (sounds a bit stupid question, I know) What are the main points to consider? What do we look for? As dh only completed his (adult) apprenticeship last year, and told the guy that he'd stay on for another year as a thank you; he's now thinking that before Aug, when the year is up, does he stay to work towards eventually taking over/ buying the business or does he look for somewhere that earns more money (coz we're sure other mechanics earn more) :)

Well, the loss of the name may or may not be a problem. If you DH is working there and continues to work there, then the customers will get to know him, his name will get out there. He just needs to make sure he is doing his best work and is on his best behaviour with the customer. Upon buying the business it would be best to send out a letter to all customers stating the it is an employee who now owns the business and as such knows them etc. At least that way the customers get some sort of continuity.

I think in this economic climate it is best not to limit a customer base. One of the classic car customers could also be a new car one. If they cannot get both cars done at the one place, then they may not go at all. Better off to take on all customers, give it a trial run and see how it goes. Has your DH got a chance to look at the books? That should be able to tell you how profitable each side of the business is.

Good luck!

In time, the customers will get to know your dh. They will know the work he does and his attitude towards customers.
Once he has built a solid relationship with the existing customers, then taking over (and changing business names) will hopefully run smoothly with little hassle.
It is a good idea to let existing customers know that it is now under new management and that the new owner is a current employee.
Astrid made a good point about limiting the customer database. People may be frightened off if too many changes are made when/if you takeover. A lot of people don't like change. It's best to do these things slowly. See what sort of business the classic cars brings in before making any decisions.

Get the figures thoroughly checked out by a good accountant. The Accountant will also tell you the best way to establish the business, ie partnership, trust etc. And they will also value the business for you.

As for your last question, what does he really want to do? If he is really passionate about taking over this company, then there is no harm (if you can manage it financially) in your dh staying there and getting a better idea of the work they do, and getting to know the customers.
If he's really not sure what he wants to do, and wants to wait a little before buying a business, then there's nothing stopping him from leaving and finding something else that pays more money.
From the sounds of it though, this is something you both want to do. If it were me, I'd encourage dh to stay where he is. Like I said above, get to know the clients and the business a little better.

My DH & I have bought and sold a business, but very different industry.

The fact that your DH works there means that he should have a fairly good idea of what $ the business is taking. If his not sure, it would be an idea to start taking note of no. of customers a day and average sale. It would be a good sense check against his books, when you get that far in the negotiations. It would be a good idea to do some research on how mechanic businesses are valued as well, is there an industry standard? You obviously want to make sure you don't pay too much for it upfront. Also, assuming you'll need to loan the money to buy the business, find out from your bank what % they lend for this type of business, it can often by quite low, particuarly in this climate. Perhaps vendor finance (or part of) is an option? The only other thing I would say is understanding any weaknesses in skill level, as you say your DH is just completing his apprenticeship.

In regards to customers leaving, I am sure there are things you can do to transition, i.e the current owner agrees to stay on as an employee for a period of time (or perhaps that may not be the best thing, depending on the person) and that he signs an agreement not to start another business for x years, even though his retiring, it just covers you.

The other thing to think about on a personal level is the hours involved and the stress side of things. I think having your own business can be great as long as things are going as 'planned'. Don't leave yourselves financially tight to start with, is the only other thing I can say.

Good-luck