Whether purchasing or selling a business, you must understand all the steps involved in the process to plan a winning strategy. Considering business transactions have important legal and financial implications, the ideal approach is to work with an expert attorney to navigate the process.
In this article, you will discover the main stages involved in Florida’s business purchases and sales.
Florida Business Buy and Sell – Valuable Tips for Buyers
Different types of businesses have distinct purchase procedures. Most business purchase transactions involve:
- Searching for business opportunities
- Filtering the best offers
- Negotiating the purchase terms
- Reviewing the business
- Offers and counteroffers
- Mutual agreements and deposit
- Due diligence (usually including a confidentiality agreement)
- Financing (if applicable)
- Reviewing tax implications
- Preparing the paperwork
- Closing the transaction
As it is plain to see, the buying process involves several complex and time-consuming steps. Depending on your schedule and legal knowledge, it may result in an overwhelming experience and unnecessary exposure to unforeseen risks.
The first step is to consult with an expert business purchase attorney to guide and instruct you through the process, avoiding costly mistakes while protecting your legal interests in the transaction.
An important step for buyers is to prepare and sign a Letter of Intent (LOI). In this document, the buyer affirms his or her preliminary commitment to purchase the business. Once the LOI is signed, the buyer has extended business evaluation opportunities.
An expert attorney will guide buyers through due diligence to identify whether an apparently “good” opportunity is actually good. If things do not go as expected, it is possible to get the deposit back and move on the better opportunities.
Florida Business Buy and Sell – Valuable Tips for Sellers
Selling a business in Florida involves four key elements:
- Identifying the seller’s goals
- Performing an adequate business valuation
- Paying attention to the sale’s timing
- Ensuring a solid purchase and sales agreement
Business owners may have different reasons to plan an exit strategy, such as retirement, partnership disputes, hardship associated with business management or maintenance, and overwhelming competition.
Different reasons result in distinct exit strategies. Hence, a seller must work with an experienced attorney to tailor the sales strategy to the company’s structure, size, and financial situation.
In terms of timing, the best approach is to prepare for a sale at least one year ahead. A well-planned transaction will give you the necessary time for final adjustments and ensure a smooth ownership transition.
A proper business valuation requires a strategic approach. An experienced business attorney will help to ensure the company is priced neither too high nor too low. Depending on the situation, it may be necessary to work with a business appraiser.
The valuation must include tangible and intangible assets, providing the full picture of the business’s current value and potential growth opportunities.
When drafting the purchase and sales agreement, sellers must guarantee that all the assets agreed in the negotiation will be part of the contract. Depending on the terms agreed, it may include:
- Facilities and equipment
- Intellectual property
- The assignment of existing contracts (e.g., suppliers, vendors, etc.)
- Employee and management structure
- Customer lists
Besides ensuring a smooth transfer of ownership, a solid purchase and sales agreement may avoid costly legal disputes and stressful situations.