Buying a business is a huge deal. Businesses are complicated, there’s a lot of money changing hands, contracts can be long and need to be carefully negotiated. As a buyer you should absolutely have legal council and they should absolutely go over anything and everything you sign.

So why are we saying you might want to take legal advice with a grain of salt?

First and foremost, business ownership is inherently risky. Entrepreneurship can be rough and there’s no guarantee that the contract you put together for the purchase of a business is going to ensure that you as the new owner will be successful. Purchase contracts are also heavily negotiated, meaning one party (you) will not get everything you want. There will be concessions with the seller if you want a business transaction to happen.

Think about the job you’ve hired your attorney to do. Their job is to protect you from any and all risk. Their job is to make sure you get everything you want. See where the problem is? 

Here’s another issue. There will be some documents that you need to sign that are industry standards, like the non-disclosure agreements necessary to receive most information on businesses for sale. These industry standard documents can’t be changed, so if your attorney asks to make changes the answer is likely going to be no. You will have to sign the agreement as-is or not get the information you’ve requested.

It’s also important to remember that there are many, many specialties in the legal field. Your family attorney who helped you with your uncle’s estate and the probate process isn’t likely to know very much about the legalities of a business transaction. It’s why you don’t go to your kid’s pediatrician if you have arthritis in your knee. You would be better suited hiring an attorney who works in the business transaction arena as they will know how to best protect you without hampering your ability to buy a business.  

We aren’t saying you shouldn’t take your attorney’s advice. You definitely should. What we are saying that you need to take that advice as it is meant – to completely and totally protect you. You also need to be sure you are hiring the right type of attorney to give you the best advice possible. 

Are you considering business ownership and hadn’t thought about finding a business transaction attorney? Would you like to know more about the documents that you’ll need your attorney to review as part of the business buying process? Leave us any questions or comments, we would be happy to help. 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

When you are serious about buying a business and ready to jump into the process, you aren’t going to show up one day and own a business the next. It’s going to take time. Probably more time than you thought. Most business transactions take months to get from the initial interest of a buyer all the way to a closing table, and that’s if both sides agree on most things.

Why does it take so long? Small businesses are complicated animals, and business transactions have a lot of moving parts. On the buyer’s side of the equation you will be putting together offers, going through documentation, getting your own licenses and permits sorted out, negotiating with sellers, meeting with attorneys and CPAs, talking to your business broker, touring physical locations, negotiating with your commercial landlord, having meetings and conference calls with the seller – you get the idea. It can at times feel like you have a new part-time or even a full-time job.

If you really want to buy a business you’re going to need to make the time to do the things that need to be done. You can’t come in and expect it all to be finished in a few days with very little effort on your part. You’re going to have to spend evenings researching. You’re going to have to be patient with the negotiation process. You’re going to have to be willing to put in the work to provide the information about yourself that’s requested. You’re going to have to get your license and permit applications done. You’re going to have to make lots of phone calls and have lots of meetings. It can feel like a long list – but it’s not impossible. 

If you’re worried about the amount of time and effort you’re going to have to put into buying a business, don’t. Small business ownership is a life encompassing affair – so if you aren’t willing to put in the effort and energy it’s going to take to get through the business buying process you probably shouldn’t be buying a business in the first place. Remember that all the work that you do before you sign at the closing table is work you are doing to help yourself. All of the time and effort you spend up front will be instrumental for setting you up for success in your new business venture.

For example, the bureaucracy that is the licensing and permitting process for small businesses can be complicated and slow. If you drag your feet on licensing and permitting requirements, putting everything off until your closing date is looming, you’re going to be scrambling when the business keys get handed to you and you’re not properly squared away in terms of license requirements. In many cases if you haven’t worked out your licensing requirements you won’t be able to open the business until you get it straightened out. If you stay on top of what needs to be done you won’t cause yourself any issues when it’s your turn to take the reins. 

The message here is you need to be prepared to spend some time and exert some effort if you want to become a business owner – but all the work you do will pay off once you get handed the keys.

Have you always wanted to buy your own business but are worried about what’s required for the transaction process? Would you like to know what businesses are currently available that would meet your goals for business ownership? Ask us! Leave any questions or comments and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com