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Checklist for Buying a Business
Acquiring another business can be a great way to expand your own venture. Buying an existing business can also be a way to get started with business ownership, using a company that is already on its feet. Whether you have a target company in mind or are researching appropriate companies for acquisition, knowing what to look for and some of the considerations when acquiring a business is key to a successful acquisition.
The experienced Broward County, FL mergers and acquisitions attorney with The Elliot Legal Group, P.A. can represent you throughout the complex business purchase process.
Find the Right Business
The process of finding the right business begins by figuring out the type of business you want to buy, taking into account your interests, skills, and financial resources. You should conduct market research and draft a business plan. It is also advisable to network with individuals in the industry. Once you have narrowed down your options, you should confirm the business structure under which the company is registered in Florida or another state, as that will give you further information about whether the company is the right fit for you.
Perform a Valuation
Your attorney can perform a valuation in order to understand a company’s value in the marketplace and the range of acceptable asking prices. This is key to moving forward with the price negotiations.
Draft a Letter of Intent
Once you have found the company you wish to purchase, you will draft a letter of intent or term sheet that will serve as a formal expression of interest in acquiring the business. At a minimum, the letter should include clear goals for the sale which can be used as a springboard for negotiation, such as price, terms, and timeline.
Secure Financing
Next, you will secure the financing to purchase the business, whether that is from your own personal funds, your company’s funds, or via a loan from a bank or private lender.
Conduct Due Diligence
Due diligence is a formal part of the acquisition process and is one of the most important parts of the acquisition process. During due diligence, your attorney will review the company’s financial and legal documents to understand everything from the company’s profitability to its customer base and legal exposure. Due diligence includes a thorough review of the company – everything from its organizational chart to its contracts, pending litigation, and more.
Finalize the Deal
Although the purchase price will largely be set by this point, the parties will conduct any final price negotiations, particularly if due diligence reveals new information that could affect the price, such as greater litigation exposure than originally anticipated. Then, at closing, the parties will sign the acquisition documents including the purchase agreement, disclosure schedules, and closing certificate.
Call an Oakland Park, FL Mergers and Acquisitions Attorney
At The Elliot Legal Group, P.A., Attorney Gavin Elliot represents entrepreneurs in the purchase of Florida businesses. Whether it is identifying a proper target company for acquisition or representing your business during due diligence, the experienced Broward County, FL business law attorney understands the business and legal considerations facing today’s companies. Call our office at 754-332-2101 for a consultation today.
