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How To Investigate Any Business Opportunity
3. Relation of the past and present to future expectations.
Bill's approach was proper, but the information he gathered was meager support for decision making.
Some of the information a careful buyer will want may take a lot of money or time to gather. He must de-
cide what sources of information are essential and which ones he can leave untapped. Bill, for instance,
might well have inquired about local economic conditions. Full information, it is true, would have required
a costly analysis, but consider what information he could have got from easily available sources:
1. Sales in the market had declined more than 50 percent.
2. Sam had been unable to rent commercial space in the building in which the market was located.
3. New supermarkets were operating in the same area.
4. Banks hesitated to gamble on the future of the market.
Bill might also have developed information about the future trend of the business, but that would have
required time. He should have known the following facts about his financial program, however:
Available funds $36, 000
Use of funds:
Payment to Sam $24, 000
Planned increase in inventory 4, 000
Advertising 1, 000
Display sign 1, 000 30, 000
______ ________
Available for working capital $6, 000
Expected net income per month ( 3% of $30,000 ) 900
Probable expense :
Payment to bank $265
Payment to Sam 295
Sam's salary ?