In part one of this two-part blog series, we went over some basics on how to identify prospective businesses if you’re in the market or considering entering it. Business owners may sell their businesses for a variety of reasons, and will be looking for ideal buyers – how do you go about evaluating which of these are best for you, plus moving forward with the very top options?
At Utah Business Consultants, we’ve provided assistance for a variety of clients with identifying and eventually acquiring quality businesses for sale in Salt Lake City and other parts of Utah. What are some of the other important steps that go into this process, and how will our business brokers assist you? Here are some basics.
Once you’ve worked with your broker to identify a good business, it’s vital to take all the proper time required to put in due diligence. There are numerous themes to look into here, from the valuation of the business to future planning and many others.
A big part of this is assembling an acquisitions team, which will include an attorney and potentially a third-party business valuation partner – however, this latter individual won’t be necessary if you’re working with our brokers, who handle business valuation themes in-house. You and your team should evaluate the comprehensive financials of the business to confirm there are no issues, plus to raise any questions or liability concerns that could crop up during the process.
Unless you’re among the handful of buyers who are independently wealthy, you’ll likely need to obtain some level of financing or funding to assist with your purchase. There are several options here, from standard seller financing (where the seller allows you to make payments over time, including interest) to angel investors or forms of venture capital that involve you giving some percentage of the business to the investor.
There are also business loan options available in some cases. Which of these options is best for you will depend on your precise circumstances, but you should have your funding arrangements made before you move forward with the sale.
Once the funding is secured, the terms are set and both parties are ready to move forward, it’s time to proceed with the drawing up of the sales agreement. This is the part of the process where working with a quality attorney is important – this party will be able to draw up the agreement and make sure all parties understand every section, plus can answer questions or solve problems. Ensure every detail of the agreement corresponds to your negotiations, plus is written clearly.