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Selling A Business: Asset Acquisition vs. Stock Acquisition

Selling A Business: Asset Acquisition vs. Stock Acquisition

So you’ve decided to sell your business, but what structure is right for the transaction? Buyers and sellers often prefer different structures due to various factors which change based on the structure and which have different impacts on the parties. Generally there are three (3) categories of factors that drive the eventual structure of a deal: (1) business issues, (2) assignments and consents, and (3) tax issues.

Should You Use a Letter of Intent (LOI)?

Should You Use a Letter of Intent (LOI)?

Term Sheets or Letters of Intent (LOIs) are commonly used in the buying or selling of businesses. The purpose of LOIs are to state clearly the principal terms that the parties have agreed to as part of the deal and to represent the intent of the parties to pursue the contemplated transaction.

The Advantages of Buying an Existing Business

The Advantages of Buying an Existing Business

Most individuals who consider themselves entrepreneurs believe they must start their own business to earn the title. However, what some do not realize is that the entrepreneurial spirit can be fulfilled in a variety of ways, not the least of which is purchasing an existing business. The following is a list of advantages for buying a business over starting one from scratch.

Selling Stock Implications When It’s Time to Sell

Selling Stock Implications When It’s Time to Sell

Many entrepreneurs faced with the demands on cash of a growing business are tempted to sell equity to outside investors, or perhaps give away stock to retain a valuable employee. Diluting your stake in this way may solve the immediate problem, but it can have unforeseen consequences when the business eventually is sold. Stockholders’ personal circumstances evolve in different ways over the lifetime of a company, and whatever the original intention everyone may not be on the same page when you are ready to sell.

Surviving Due Diligence & Contract Negotiation

Surviving Due Diligence & Contract Negotiation

You have endured multiple meetings with potential buyers. You’ve written dozens of emails and suffered through several rounds of negotiations to secure the best price and deal structure. At last you have decided on the offer to accept. That’s the worst of it over then? Think again – you have yet to experience the joys of due diligence and sale contract negotiation.

Letter Of Intent: Saving You Time & Money When Buying Or Selling A Business

Letter Of Intent: Saving You Time & Money When Buying Or Selling A Business

If you have the opportunity to buy or sell a business, negotiating the terms of a letter of intent (an “LOI”) is one of the first and most critical steps in the process of completing the transaction. A well-written letter of intent provides a valuable foundation for a potential transaction as it captures the parties’ intentions with regard to the structure, timing and material terms of the transaction. An LOI often imposes significant obligations on each of the parties, and consequently is typically the product of fairly intense negotiations between the parties.

Which Business Valuation Report Matters?

Which Business Valuation Report Matters?

The various types of valuation reports produced by a business appraiser can be confusing to an entrepreneur, especially when the appraiser belongs to more than one valuation association. Under most appraisal standards, a business appraiser can produce two types of reports: a detailed appraisal report or a calculation report.

The Significance of Due Diligence Process when Acquiring a Business

The Significance of Due Diligence Process when Acquiring a Business

Throughout the lifecycle of a business, it is important for a business owner to remain focused on increasing the profitability, competitive advantage and market reach of the business. An entrepreneur typically accomplishes these objectives by (i) reinvesting the profits of the business to increase its workforce, customer base and cash flow and (ii) using business profits (along with other financing) to acquire competing businesses. Such business acquisitions typically serve two purposes by eliminating competitors and increasing the growth rate, product and service offerings, and market share of a business.

5 Common Mistakes When Starting a Business

5 Common Mistakes When Starting a Business

It never ceases to amaze entrepreneurs how certain seemingly simple decisions, made during the early years of their business startup, can become fatal errors down the road. After meeting with many business owners across a broad spectrum of industries it’s common to find them enduring the consequences of the same, or similar, errors over and over again.