The most important allies in the purchase of a business can, and usually will be, your advisors. It is critical that you have picked experienced accountants, attorneys or brokers to represent you. Let’s focus on the accountant and attorney for the sake of this article.
Hiring the expertise of an experienced business broker makes good financial sense, especially when dealing with business decisions outside your own area of expertise. If you are considering buying or selling your business, the primary goal is, of course, how to optimize your sale or purchase. Getting the services of a reliable and knowledgeable business broker can make a huge difference.
In a business sale transaction, the parties, through their negotiations and discussions, initially may reach a meeting of the minds on the basic terms of the deal such as price, timing and other major issues. The next step is typically for one of the parties to have his or her attorney draw up the definitive sale documents that will be signed as part of the transaction. However, the drafting process can sometimes be costly and time consuming, and thus it is often advisable for the parties to sign a “letter of intent” or “term sheet” to memorialize the basic terms of the deal and to make sure that both parties are clearly in agreement on those basic terms.
As usual, to do this you will need to spend time working ON the business, not just IN the business.