Business Purchase/Sales
Buyers, Sellers, Brokers
Increasingly, it’s the intellectual property (IP) and intangibles (not the physical assets) that represent the key value of businesses:
"IP"— Trademarks, Copyrights, Patents, Trade Secrets
Intangible — You usually can’t see it or touch it
Human — Goes home at night
FOR SELLERS:
Their business represents their life’s work and most of their net worth. Sadly, only about 1 out of 4 privately held businesses actually sell, according to statistics collected by the International Business Brokers Association. So, unless you want to just close the doors and retire, it’s smart to take steps to maximize the value of the business.
For Sellers to maximize value – they need to plan for the transferability of the value of their business … not just the assets.
FOR BUYERS:
Buying a business has many advantages, including an established clientele and cash flow. But, buying a business can also be fraught with risks. For example, Buyers need to be concerned about issues such as:
- verification of books and records;
- transferability of licenses, if any;
- an acceptable lease;
- training and transition period;
- non-compete by seller;
- obtaining financing;
- no liens or encumbrances;
- retention of key employees;
- verification of inventory.
For Buyers to reduce risk – they need to verify that they are getting what they are paying for (due diligence) by getting advice from an experienced business attorney.
FOR BROKERS:
Brokers need to help Sellers and Buyers understand the value and market potential of the business - understanding that the numbers don’t tell the whole story. Brokers act as intermediaries in facilitating the negotiations.
For Brokers to close the deal – they need bridge the gap between the Seller and Buyer expectations and find it helpful to have the parties assisted by a business attorney who takes a practical approach to resolving issues.
The following articles may be of interest:
- Buying a Business?
- "VALUE DRIVERS" - Tips to Make Your Business
More Successful! - Considering a Franchise?
- Tips from a Successful Acquisition - Good records and intellectual property "pedigree" are critical to a successful deal.
