BUY OR SELL A BUSINESS
Preparation for Sale
It is extremely important to properly prepare a company for sale. Determining the best method of presenting the company for different types of buyers is essential. Selling to a competitor who will combine the seller business with its own business is quite different than a sale to a buyer new to the business.
Pre-Sale Due Diligence
Full and complete due diligence is required to protect a buyer from unknown liabilities, incorrect financial statements and other exposures when buying a business. Reviewing the background and deal history of the other party is also important.
Financing a Purchase
Over the years Bill has developed a wide network of connections including financing entities and he will be able to find and connect you with the best financing option for your situation. Additionally, for a listing of some general information regarding funding programs, see the SBA website, www.sba.gov
Negotiating the Terms of Sale
It is a very rare case where the owner of a business can negotiate the best possible sale price and terms. They are too involved in the business and it is best to have them behind the scenes approving or disapproving a given deal. A professional can take positions that are more aggressive with the fall back to the owner or prospective buyer on the final decision.
Pro Forma (GAAP) Financial Statements
If you are looking to sell your business, most buyers will expect the financial statements to be in accordance with Generally Accepted Accounting Practices (GAAP). In addition many standard purchase agreements state that the seller's financials will be prepared in accordance with GAAP. It is preferable to have GAAP financials for several years prior to sale, or at least be able to go back on a year end basis and make estimated adjustments to GAAP. Bill will make sure your financial statements are in proper order and will present the best possible picture of the financial health of your business in order to attract the best offers.
It is important for both sellers and buyers to make sure the purchase agreement reflects the negotiated expectations of both sides. It is important to reflect in the agreement the warranties in relation to the business, its financial statements and legal and other obligations.
Proper tax planning is essential to the seller to realize the maximum after tax cash flow from the sale of their business. The sale structure has a large impact on the after tax proceeds to the seller when they are doing business as a subchapter C corporation, which is quite different from the situation when the seller is a sole proprietorship, partnership or Sub S corporation.