Buying a Business? Tips to Get You to the Closing Table

Buying a business is often a difficult and complicated process.  It is not one you want to try alone unless you are very experienced.  Here are ten tips to make sure once you've agreed to terms with the seller, you reach the closing table:

1. Establish a team of expert advisors. You will likely need tax, legal, financial and industry advice.  Engage your CPA, attorney, financial planner and someone with knowledge of the industry.
2. When seeking advice, make sure your advisors have all the information you have.  Involve them in document review, phone calls, meetings, etc..  Uninformed opinions kill deals.
3. Be ready with your escrow check immediately after coming to agreement on terms and conditions of the purchase.  Delays with the escrow check are a strong signal to a seller you aren't serious about the purchase.
4. Be ready with your due diligence list within 1 to 2 days after coming to agreement on terms and conditions of the purchase.  Be patient in receiving this information as many sellers aren't well organized to provide everything requested and they still have a business to run.  Expect 5 to 10 business days to receive everything you ask for.
5. Take adequate time to conduct your due diligence -- at least 5 business days for a simple business in an industry which you have significant experience and no more than 15 business days for a more complex business or business which you lack experience.
6. Keep emotion out of all communications, i.e., emails, phone calls and meetings.  If you begin to lose patience, step away from the computer, call back or leave the meeting.  Wait until you regain composure before responding. 
7. If you require financing have a copy of your resume, personal financial statement, bank statements and  credit report ready to go.  You will also want to complete a brief 5-10 page business plan with a financial forecast by the end of your due diligence.  Ask the seller questions to help you complete your business plan.
8. If you are negotiating a new lease or transferring a lease you will also need to have a copy of your resume, personal financial statement, and credit report ready to go. 
9. Include all relevant parties in all communications, i.e., your advisors, buyer's broker, seller's broker, etc. in all communication with seller.
10. Cooperate with your broker in returning all documents including due diligence materials, contingency sign-offs, contract addendums, etc. in a timely manner.

Keeping these 10 items in mind will help you avoid deal delaying and/or killing actions and get you and the seller to the closing table on time and on good terms.

For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.