| The importance of research | | | | the business purchase: negotiating the terms. Your |
| Most entrepreneurs know enough to conduct | | | | business attorney will be able to keep you |
| research on the industry they plan to enter. You | | | | grounded and make sure that any offer you |
| need to know what the industry standards are, | | | | make will be reasonable when considering the |
| what the trend of the business is and where the | | | | financial health and history of the company. No |
| market plans to take the industry in the long | | | | matter how successful the company already is, |
| term. Often forgotten in this extensive search for | | | | you never want to pay too much. |
| information is the research needed for the | | | | When making an offer, be sure to offer an |
| acquisition of an existing business. The due | | | | amount for which other similar Little Rock |
| diligence required can be enormous and | | | | business have been sold. Offering too much or |
| overwhelming for a soon-to-be new small | | | | too little is a common pitfall of business buyers. |
| business owner. However, it is an important first | | | | Too small an offer sends the message that you |
| step of any business purchase. | | | | have no idea what you are getting into and a |
| Some questions you should you ask include: | | | | person who has spent their life building a good |
| - Has the business you are buying ever been | | | | reputation will walk away. Too large an offer and |
| sued? | | | | you will find yourself paying for years into the |
| - Is it currently involved in any litigation? | | | | future before you start to make a profit. |
| - What is the company's financial picture going | | | | Choosing the structure |
| back at least two years? | | | | Every business purchase is structured differently. |
| - How many customers are long-term versus | | | | The right structure can save you money in the |
| one-off customers? | | | | immediate aftermath of the closing as well as in |
| - Will there be any contracts awaiting completion | | | | long term financing. The wrong structure can end |
| as soon as you finish your purchase? | | | | up costing you more than the business is worth. |
| - What kind of debts are owed to the company's | | | | Hiring an experienced small business attorney can |
| creditors?You should seek the help of a small | | | | make all the difference during this crucial stage. |
| business attorney while sifting through the | | | | Some tips to remember |
| mountains of paperwork of an existing business. | | | | - Another deal is right around the corner, so do |
| Your business lawyer will be able to explain the | | | | not be afraid to walk away. |
| intricacies and complexities of business laws and | | | | - Trust your professional advisors. They have |
| how they will affect your purchase. | | | | seen every deal in the book and know how to |
| Making the deal | | | | sniff out a rotten one. |
| After your research comes the second step of | | | | - If it seems too good to be true, refer to tip #1. |