It’s Business, And It’s Personal

Crucial steps when buying a business

On Behalf of | Dec 1, 2017 | Buying & Selling Businesses |

The purchase of an existing business offers entrepreneurs in North Carolina a chance to skip the risks and hard work of launching an enterprise from scratch. A business buyer gets to acquire an operation with revenue, customers and other valuable assets. However, the buyer must generally go through a long process before completing a purchase. The entrepreneur should conduct a careful search to find an opportunity that fits personal skills and lifestyle goals.

When someone does identify a business for sale, the process of due diligence will vet the business prior to a commitment to buy. The investigation into the value of the company and its books will generally require the assistance of an accountant and business valuation consultant. An accountant will scrutinize records to see if they appear valid and alert the buyer to missing or questionable information. A valuation consultant should consider factors beyond revenue and assets. Issues like the possibility of clients leaving when the original owner sells could severely impact the value of a company.

Once an entrepreneur determines a business to be worth buying, financing becomes necessary. This can be accomplished through seller financing, the attraction of private investors or through a commercial lender. The preparation and signing of a sales agreement will lay out the terms of the transaction and formally transfer ownership.

A lawyer familiar with buying and selling companies could play an important role throughout this process. The entrepreneur might retain an attorney in the early stages of due diligence to gain important insights about legally required disclosures regarding real estate and other assets. Legal advice might allow a buyer to fully understand the terms of the sale before signing the document.