ith the economy beginning to rebound, now may be the perfect time to buy or sell a business. Interest rates are low, consumer confidence is on the upswing, and prices have adjusted to the new economic realities.
We handle many business acquisitions each year of all different types. Our experience in this area over many years has involved us in the sale and purchase of many types of businesses, including:
- restaurants and taverns
- manufacturing and distribution businesses
- manufacturer’s representative businesses
- medical and dental practices
- beverage distributorships (including LCB licensing)
- franchise restaurants
- auto dealerships
- retail stores
- shopping centers
- service businesses.
Sale prices for these transactions have ranged from under $100,000 to well in excess of $25,000,000.
Some of the preliminary issues to be raised at the outset of any purchase or sale transaction include:
- establishing a purchase price
- securing necessary financing, including bank financing and seller take-back financing
- finalizing the form of the transaction (sale of assets vs. sale of shares or ownership interests)
- a seller’s no-compete agreement
- ownership or leasing of real estate used in the business
- supplier and employee retention/transition.
In addition to these preliminary considerations, buyers should consider (and sellers should expect) performing significant due diligence to evaluate the business prior to closing. This includes reviewing financial records, tax returns, cash flow, inventory patterns, operating costs, condition of equipment and building, title to real estate, labor relations, government compliance, supplier relationships, equipment leases and similar matters.
Our extensive experience in buying and selling businesses causes us to recommend to potential sellers that they be prepared in advance for a potential sale with up-to-date and accurate business records and that potential buyers be prepared to investigate fully all aspects of the operation of the business prior to closing. In this way both parties to the transaction can avoid surprises.
Let us know if we can help you in this area.
— Kevin Palmer