Buying or Selling a Calgary Business? We Can Help.
Buying or selling a business is a complex undertaking, and many buyers and sellers assume it’s like buying or selling a house. Nothing could be further from the truth.
While many small business owners wear many hats, negotiating the purchase or sale of your business is too important to take a chance on. Even though you may have negotiated a great deal, complicated language and confusing language can leave any business reeling. Having an experienced team behind you will ensure that you get what you bargain for in what may be the biggest move that you make.
Whether you’re buying or selling, there’s a great deal of planning involved to avoid poor financial outcomes.
Possibly the best advice we can offer is to work with professionals who have helped others in your situation: financial advisors, legal advisors, and business brokers or mergers and acquisitions advisors. They’ve seen successful deals and they’ve seen deals go sideways. They know how to protect you and make sure you’re going to achieve your goals with the least amount of stress.
Following is some information that will give you a better understanding of many of the issues involved.
Buying a Business
Legal Services for a Business Purchase
Your Calgary business purchase lawyer can help you move through the exciting process of buying a business. We can review documents, assist you with a business purchase and sale agreement, and help you decode legalese.
The Business Buying Process
Don’t be tempted to take shortcuts. It’s important that you follow a sound business purchase process in order to get the results you’re after. The first step in the business purchase process is determining your goals.
Searching for a Business to Purchase
You will probably have to spend a lot of time searching for a business for sale. If you just wait for the right one to appear online, you may be waiting a long time. Most business sales are kept very confidential. This means that there are always many businesses that are not advertised.
Financing the Purchase
It is important to understand the ways to finance a business purchase so you can determine the size of business you’re capable of buying. You should try to secure financing or at least get indicators from lenders before you start a serious business search.
Determining Business Value
Business valuation is a complex affair. There are many different methods of valuing a business, but in the end it simply comes down to a negotiated agreement between you and the seller.
Preparing the Letter of Intent
The Letter of Intent to purchase a business (also called an Offer to Purchase, is not necessarily a legally binding document. It simply says that you would like to purchase the business at a specified price and upon specified terms and conditions.
Undertaking Due Diligence
Buyer’s due diligence is the investigation you will engage in after the seller has accepted the offer to purchase or letter of intent, to ensure that the business is worth the investment and has no substantive risk factors.
The Business Purchase Agreement
Buying a business is completely different than buying your home. A business purchase agreement is a much more complicated document and, to protect yourself, experienced legal advice is an absolute necessity.
Selling Your Business
Legal Services for a Business Sale
What can your business sale lawyer do for you when you sell your business? We will examine these documents and explain any issues to you early in the process will prevent problems down the road.
Succession / Exit Planning
Succession or exit planning helps you maximize the value of your business. Even if you’re not planning to sell your business in the near future, it’s wise to have an exit plan in place to protect your business against unexpected events.
Preparing for the Sale
Succession planning provides the roadmap for the sale of your business. Once you’ve decided to sell and worked with your team of advisors to establish the framework, it’s time to start preparing the business for sale—enhancing its value—to maximize the selling price.
How to Choose a Business Broker
Many sellers make the mistake of using an unqualified business broker. In Alberta, the sale of businesses is not regulated and anyone can act as your broker. Selling a business is far more complicated than selling a house or commercial property and requires thorough knowledge and a different skill set.
Preparing for the Buyer’s Due Diligence
The due diligence process is the investigation the potential buyer will engage in after you have accepted the offer to purchase to ensure that your business is worth the investment. Many deals fall apart during due diligence, often because the buyer finds something unexpected that, even if it is easily resolved, turns the buyer off the idea of purchasing.
The Business Sale Agreement
A business sale agreement (Purchase and Sale Agreement) is a much more complex legal document than a house purchase agreement, but many buyers and sellers make the mistake of using standard form real estate documents. These agreements are not designed to deal with all the issues involved in buying or selling a business, and can cause a lot of grief, confusion and uncertainty on both sides.
Get the Legal Help You Need
Whether you’re buying or selling a business, our lawyers have the experience to guide you through the process quickly and stress-free. Contact us today.