In Show 036 – What to look out for when Buying a Business originally broadcast on Facebook Live on Monday 27 November 2017 we explore this interesting topic.
Today on Fast Fix Monday we are going to discuss the things you need to know before buying a business. There is plenty of tasks you need to complete before you make the right decisions. To help you along the way we have developed a checklist that we have cleverly titled The Business Checklist.
Click this link to find it: Checklist page
Well before you sign on the dotted line you need to have done your homework. You have to decide what legal entity you control is actually going to buy the business. A meeting with your lawyer and your accountant will ensure you make the right decision. You also have to think about the conditions you want to include in the contract. Chief among those are the details of the due diligence required.
Due Diligence Enquiries
A thorough and complete investigation of the company you are considering buying is an absolute must. All aspects of the company have to be looked at to make sure you are getting a good deal. Things you need to look at include the lease of the company location. The number of staff and their salaries. What equipment, patents or other intellectual property does the company own? Kicking the tires is not going to be enough. Dig deep to make sure you’re getting the most for your money
Obviously you need to have the money in place to purchase the new business but there are other things you have to consider. The timing of any deposits that have to be made are hugely important. As is the date when the purchase will be finalized. Taxes and other levies may have to be paid as well. There are going to be consulting fees too. You lawyer, accountant or any other adviser are going to be needed for a successful purchase.
A new business may require a new location and that means dealing with real estate. If there is an existing lease you need to know all the details before you purchase the new company. All the terms are important. Those include the price, the length of the term and whether a bond is required.
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.