It can be exciting to buy or sell a business, but there are also important steps to keep in mind to ensure the process is completed correctly.
Buying and selling
Before buying a business, it is helpful to research the market to understand how many customers the business attracts, what its reputation is in the community and if it is financially successful. Then, if the buyer wants to go forward with the transaction it’s helpful to draft a business plan. This can include planning for the purchase price and any financing required.
When selling a business, business owners can prepare by organizing their business records and ensuring they have all financial documents ready to provide to a buyer. It may also be helpful to create a list of potential buyers and draft a confidentiality agreement for them to sign. Once the transaction is completed, the business owner will need to notify their employees and prepare their last paychecks.
Buyers and sellers may have disputes during the process. These may include disagreements about the value of the business, the accuracy of financial records and who is responsible for paying outstanding amounts due to suppliers.
They may also disagree about who owns the trademarks or copyrights for the business, if applicable. Also, both the buyer and seller need to be very clear about any existing contracts or agreements they have, as well as whether those will terminate when the new owner takes over.
Even with careful planning, disputes can arise. There is support available for business buyers and sellers who need help to resolve these concerns.