It is a monumental decision to buy or sell a business, and we understand how much this can affect your life.
During this stressful time, our dedicated team of solicitors are here to make the process as easy as possible. We always ensure that we provide accurate documentation, communicate effectively with all parties and are on hand to provide expert advice when needed.
Integra solicitors manage all of the legal aspects that are involved in buying and selling. These include:
- all contract negotiations
- due diligence
- providing advice with regards to warranties and indemnities
- advising on and preparing secure loan documentation
- the transference of business assets, stocks and shares
There are several considerations before any legal work begins. We will look at those now.
Advice for buying a business
Before buying a business you will need to consider if it is the type of business you want.
Are you looking to buy a start-up or new business to build from the ground up? Or would you prefer an established business that already has a good client base and track record?
There are more factors to take into consideration such as the market projections, is there scope for your business to grow and be earning for years to come? Or are you trying to enter an already saturated or weak market?
What about the monetary value of the business you are trying to purchase, are you getting a good deal? The business may be valued differently by the seller to the way you would value it for example, so you need to understand why and how they decided on the figure they have.
There is also the reason as to why the owner is selling the business. If it is performing poorly, you may want to look at the reasons for this before committing to buy. It could be down to location, market trends or just poor management. Whatever the reasons, they could work in your favour to help you potentially buy at a reduced price.
It is also important to fully understand the industry you are entering into. This will include the industry standards and its controlling regulations as these can make a business challenging to run.
You also need to factor in the obligations to the existing staff as you may be inheriting unwanted issues or be facing resistance to the changeover. You are responsible for and must understand the employment law and HR practices.
Finally, a business plan is essential. You need to have a clear and structured plan on how you intend to increase the business turnover and have realistic and achievable goals in place.
Advice for selling a business
It can take between 12 and 18 months to complete the process of selling your business and the size of your business will factor into how easy this process is. You will need to consider all your related responsibilities and obligations. These include business tax, capital gains, existing and new partnerships, the transference of stocks and shares and your staff.
It is a good idea to prepare your business to ensure it is an attractive prospect for sale. You should have all paperwork, accounts, customer details and the relevant properties in order before sale.
Know the value of your business by obtaining a fair and accurate valuation. You should be aware of how this valuation was reached so that you are in a strong position for negotiations.
Part of the process will be to understand how due diligence affects the sale. There are confidentiality issues that are worth considering so that competitors and staff are not alerted too early on in the process, which will give you time to get your business in order.
Finally, ensure that the deal is financially structured in your favour. This money is what you will have to move on to the next stage and it needs to be ample to set you up in your future venture, even if that is retirement.
Talk to one of our solicitors today to discuss the prospect of buying or selling your business.