What is the existing IT worth? Make sure you don’t buy a lemon!
When you are buying a business, ask yourself: what is the existing IT infrastructure like? What do I need to look for? Am I going to be up for a bunch of extra costs right when I don’t need them?
It is well worth getting a second opinion on the existing IT in a business BEFORE you purchase. We have a come across some interesting cases in the last few months that have made us think – for instance a guy bought a business in Wellington, only to find that the server had no backup software, no antivirus and there has been no maintenance done on it for over 3 years. ALL of the PCs needed to be replaced. He is looking at $2000 to get the system updated with backups working and antivirus installed and another $8,000 – $10,000 to get all the PCs replaced.
Some things to look for
- How old is the hardware: the PCs, servers, printers and routers? There should be invoices for the purchases – ask to see these.
- Remember if these are on the books as assets then they may have been deprecated off the books. It is still worth having a look at the original invoices to see what exactly has been purchased against what is installed AND even if they are old enough to be depreciated off. It is better to know now what future costs you may be up for – then you will have no nasty surprises.
- What is the mode of the PC/Server ? It is very important to check this out.
- Is the PC a consumer model? (If so, it means that you may not get as long a lifespan out of it).
- If it is a non branded machine, are parts easily available? (If it is over 3 years then this is less likely.)
- Is it still under warranty? If it is a branded machine like HP you may be able to purchase warranty extensions, giving you a bit of piece of mind for another year or so.
- If the server is backing up to tape, when were the tapes last replaced? What tapes are offsite ?
- Have the backups ever been tested? That is, can you actually retrieve data off them?
- What is the software on the machines – i.e. Office? We are still coming across sites that are running Office XP – which is nearly 9 years old. The licence has just been transferred from one machine to the next…
- What are the current licences? If they are OEM it means that the licence has to stay with the machine, but if they are Open Value/retail they can be moved from machine to machine.
- Is the site FULLY licensed? Will you have issues if you get audited?
- What antivirus is running and where are renewal notifications going? If you miss the reminder and don’t renew, then your system can become vulnerable to attack.
WHO owns the domain name for the business?? For instance, I’ve made sure that I own all the names relevant to my business, i.e.
And a few more
Where do the reminders to renew the domain go? This is particularly important – if you miss the reminder and don’t renew the domain and if you are using this for your email – i.e. email@example.com – then your mail will stop!
Who has access to the system – i.e. administrator passwords – levels of security.
Checking first saves headaches later
Checking the IT of a business before you buy should be part of your due diligence process. These checks save you from unnecessary expense later on and the hassle of interruptions to business. You can make sure that systems are up to date and protected.
What you find during your checks can help you decide on the price you will pay for the business.