Business Buying Basics
Many people think about buying a business or even creating their own business at least once in their lifetime – but there never seems to be a good starting point when it comes down to getting the process started. Between various legal documents, accounting issues, due diligence, and insurance, there is a lot to decipher and sometimes a quick Google search just does not cut it. Whether it is your 10th business you plan on buying or your 1st, we are here to give you a quick rundown of the general principles.
Piece Together Your Personal Team
Putting together the right team is one of the most important steps when it comes to buying a business. Your dynamic team should consist of people who have your best interest at heart and are best suited to help you. This can include CPAs, a lender, a lawyer, and even an insurance advisor. This diverse group can help tremendously when it comes to reviewing the business’s previous financial records, reviewing, or preparing legal documents, and assisting you in finding the best business that suits your interests, needs, and budget.
Letter of Intent
This step generally is a nonbinding agreement that allows for a more thorough investigation that comes in in the next due diligence step.
Due Diligence is an investigation that occurs where you and your team analyze financial statements, tax returns, any possible liabilities, and legal issues that could arise.
This step is fairly straightforward and is something you probably do every day without even realizing it. Gather together the information that you and your team have learned from your investigation and haggle for a price that fits into your budget.
Closing the Deal
Once you have negotiated the terms you are ready to close the deal. Once you receive the Bill of Sale, sign the purchase agreement and the security agreement – you have reached the finish line.
The professionals here at the Center for Financial, Legal, and Tax Planning, Inc., are a full-service team that will assist and guide you through every step in the process of buying your dream business. For more information, please reach out to us at (618) 997-3436.