You found a business that suits you, and have finished going over financial records and all other aspects of the business during due diligence. It is time to make an offer, but how do you determine what that offer should be?
First, consult with your business broker. There are formulas which are usually applied to value a business and so this ought to function as the starting point in order to decide what amount to offer.
The evaluation will need to be modified to take into account any details uncovered while in the due diligence phase. Developing a complete picture of the value of the business will allow you to determine whether or not to move forward as well as the highest price that you are prepared to spend.
As soon as you have arrived at a price you will provide the seller with a letter of intent. This letter of intent is going to detail the price in addition to conditions by which you will purchase the business.
As soon as the two parties come to an agreement, a purchase contract is drafted for the two parties to sign. The purchase contract might be quite a few pages long due to the fact it itemizes each and every component of the sale. This step commonly requires using the services of your business broker, a CPA along with an attorney to guide you in the process.
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