| Businesses are bought and sold everyday.
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| | SELLER:Analyze all financial and
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| Each transaction is
| |
| | non-financial documentation provided
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| unique, yet there are fundamental
| |
| | as a response to your Letter of Intent.
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| elements to the purchase
| |
| | For subjects that are
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| process that are common. The purpose of
| |
| | beyond your level of expertise, acquire
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| this article is to
| |
| | appropriate
|
| highlight the sequential components of a
| |
| | professional assistance.9) IMPLEMENT A
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| typical business
| |
| | STRUCTURED DUE DILIGENCE PROGRAM:Validate
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| purchase plan. Whether you are a first
| |
| | provided information, research
|
| time business buyer, or
| |
| | appropriate target
|
| a veteran business acquisition
| |
| | markets, gather data on key customers,
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| specialist, it is imperative to
| |
| | employees, patents,
|
| understand the evolution and eventual
| |
| | legal encumbrances, leases, purchase
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| structure of a business
| |
| | contracts, pending
|
| purchase transaction.Purchasing a
| |
| | legislation, key suppliers and
|
| business is an iterative process. There
| |
| | technology trends.10) UTILIZE
|
| are logical
| |
| | PROFESSIONAL, 3RD PARTY BUSINESS
|
| and cost effective steps that need to
| |
| | VALUATION SERVICES:Contract with a
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| sequentially followed to
| |
| | certified business valuation consultant
|
| maximize eventual purchase success and
| |
| | to
|
| minimize cost. For the
| |
| | define a fair market value, and
|
| business buyer the ultimate goal is to
| |
| | equitable purchase term
|
| find and purchase a
| |
| | structure for the business you seek to
|
| viable business for a fair market price,
| |
| | buy.11) INVESTIGATE ALTERNATIVE FINANCING
|
| acquired via most
| |
| | ALTERNATIVES:Based on a valid business
|
| favorable purchase terms. Following
| |
| | value determination, seek and define
|
| these sequential steps will
| |
| | as many ways you can to purchase a
|
| get you there:1) DEVELOP YOUR PURCHASE
| |
| | controlling interest of the
|
| CRITERIA:Define all relevant criteria to
| |
| | business with as much of other people's
|
| qualify a business for purchase2)
| |
| | money as is reasonable.12) PRESENT YOUR
|
| ESTABLISH YOUR "BUYING TEAM":A variety of
| |
| | FINDINGS TO THE SELLER AND NEGOTIATE A
|
| skill sets and expertise will be needed
| |
| | DEAL:After your due diligence is
|
| to cost
| |
| | completed, document your key
|
| effectively locate, evaluate, structure,
| |
| | findings, organize your information and
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| valuate, fund and
| |
| | present your case to
|
| negotiate an equitable purchase
| |
| | the business seller. Hire a credible 3rd
|
| agreement3) DOCUMENT YOUR PROFESSIONAL
| |
| | party negotiator or do
|
| "CREDITABILITY":Providing a written
| |
| | it yourself.13) DOCUMENT THE AGREED UPON
|
| summary of your professional skills,
| |
| | PURCHASE TERMS AND CONDITIONS, SET
|
| experiences and successes of your entire
| |
| | A DATE:Put everything agreed to in
|
| buying team will
| |
| | writing. Finalize the purchase
|
| fortify your image with any business
| |
| | agreement, have your legal counsel
|
| seller you approach4) FINALIZE AND
| |
| | review it. Both buyer and
|
| DOCUMENT YOUR FINANCIAL RESOURCES:Every
| |
| | seller sign a Letter of Intent,
|
| business seller will want to quickly
| |
| | committing both to the agreed
|
| qualify your
| |
| | upon purchase terms and to set a date
|
| financial wherewithal early on in the
| |
| | and time to close the
|
| mutual evaluation
| |
| | deal.14) SIGNATURE OF FINAL PURCHASE
|
| process. Secure your finances and
| |
| | DOCUMENTS:If the deal is an equitable one
|
| document your capabilities.5) EDUCATE
| |
| | and both parties have conducted
|
| YOURSELF ON BUSINESS PURCHASE TERMS AND
| |
| | themselves in a constructive and honest
|
| CONDITIONS:Take the time prior to your
| |
| | manner, this should be
|
| first business pursuit to educate
| |
| | a "joyous" occasion for both parties and
|
| yourself on as many common business
| |
| | their representatives.Today's successful
|
| purchase terms and
| |
| | business buyer is a disciplined person
|
| conditions as possible. Understanding
| |
| | using
|
| your purchase deal
| |
| | a definitive process to find, qualify,
|
| structure alternatives will maximize
| |
| | value and negotiate for
|
| your negotiation
| |
| | purchase viable business acquisitions.
|
| effectiveness.6) DEVELOP A COST
| |
| | If a business buyer has
|
| EFFECTIVE MEANS TO LOCATE VIABLE
| |
| | a written purchase plan, any number of
|
| BUSINESSES
| |
| | other supportive people
|
| FOR SALE:Decide if you are only going
| |
| | can effectively participate, understand
|
| after businesses that are "for
| |
| | their role and
|
| sale" or those that can be bought.
| |
| | contribute to the buyer's overall
|
| Establish a variety of means
| |
| | business purchase process and
|
| to define these businesses.7) UTILIZE
| |
| | objectives.If you understand the
|
| NON-BINDING LETTERS OF INTENT:If you find
| |
| | fundamental steps involved in a typical
|
| a viable business you like, document your
| |
| | business purchase process you are well
|
| intentions, intended deal structure and
| |
| | on your way to being
|
| what exact information
| |
| | able to effectively write a plan you can
|
| you need to start your purchase due
| |
| | use to meet your
|
| diligence.8) EFFECTIVELY ANALYZE ALL
| |
| | personal business acquisition goals.
|
| DOCUMENTATION PROVIDED BY THE
| |
| |
|
