If you are buying or selling a business, let’s talk and see how best to get a transaction done that gets you what you want. We may be able to find you the purchasing partner you are looking for.
An overwhelming majority of businesses sold, are NOT sold in the seller’s ideal time frame. Usually, something in the business owner’s life comes up and the owner is forced to sell the business quickly. Having a contingency plan with the right documentation in place, will significantly increase the value of your business.
By going through the process of preparing your business in the event it needs to be sold, your business will be financially prepared for anything including the potential acquisition of other businesses, pursuing a private offering, SBA loan, line of credit or other credit facility. Your business will also be able to survive a regulatory, tax or state audit.
Do your corporate, tax and financial statements all tell the same story about how your company is organized? Many times they do not. It’s easy for business owners to handle corporate issues when they arise, well before the first taxes are prepared. Then, when it’s time to file taxes there is a gap in communication and the accountant doesn’t know all the details of your corporate structure. This can lead to inconsistencies in your financial statements. When inconsistencies are picked up in due diligence it decreases the value of your business.
You wouldn’t buy a used car without lifting the hood and you shouldn’t buy a business without doing reasonable due diligence!
Due diligence is looking at a business from as many angles as posible to investigate the business’ true value. This includes reviewing all financial records plus anything else deemed material to the sale. At a minimum due diligence should include investigating the company’s operating procedures, historical financial results, financial projections, corporate formation and ownership, employee relations and active agreements. Due diligence is a way of preventing unnecessary harm to either party involved in buying or selling a business. Invest in due diligence now to avoid disaster later.