What To Look For When Buying A Business | Dallas/Fort-Worth Business Brokers

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What do you look for when buying a business? There are so many things to consider, the first thing you want to do is get advice from a broker who does this as a fulltime job. You want to dive into the company’s finances and legal documents. With this said, you should have a ton of questions regarding day-to-day operations from the front door to the back door. Let’s get started. You’ve identified a business that is up for sale through a friend, a business listing or a broker. You should be starting to have many questions, such as what are the owners plans, what kind of growth potential is there, why are they selling, what are the details on the P&L’s, how much do I need to put down and how do I structure my offer?

Retention of key employees is critical. You might make it a condition of the sale, if you can’t retain key employees then you might have bigger issues that can be seen. Some salary compensation, equity or even a new title might sweeten the pot and entice them to stay and help grow the newly acquired company. Furthermore, the retained employees will have intimate knowledge of day-to-day operations, employee issues and detailed customer information, all giving value to you as the new owner. Having current owner and/or key employees remain with the company for some amount of time might ensure continuity and flow of operations and allow you to get comfortable with the details of the operations through informed eyes. Most if not all the existing employees will stay. Changing jobs is a big decision and will require more than this to convince them to leave, that is of course unless you give them reason. Best advice is do not change anything for a few months. Let everyone get used to each other, then share your vision and build your team accordingly

Additionally, inquire if the seller owns or leases their current building. Will you be able to continue the lease or renegotiate the terms of the lease after the sale? What equipment does the company own? Is there any leased equipment? Where do they spend marketing dollars? Are there any vendor contracts? All good questions to be asked and certainly answered prior to making a buying decision.

If the business you are buying has outstanding or unpaid payroll taxes, sale taxes or property taxes, will you assume these liabilities? As a broker, our recommendation is to secure written confirmation of any outstanding taxes having been paid or not and make sure there are no liens on the property. You want to purchase this company with a clean slate.

What prepaid expenses exist, and will they be pro-rated before completion of the sale? Digital media has such a large footprint in our personal and professional lives. Any marketing, advertising, or SEO services in place, and if so, will they continue under current contracts? Ask the current owner for a list of all agreements, subscriptions, memberships and contracts to determine if these will be pro-rated, cancelled or continued upon the business sale.

Accounts receivable (AR) is also an issue that should be sorted out before the closing day. How much AR exists and who is going to collect it. Will you as the new owner collect or will the previous owner still get paid for some portion of remaining amount? If you negotiate to pay for the AR, will the current owner sell it to you at a discount since there is no guarantee of collecting it as the new owner? Either way, during the due diligence phase you really need to determine how the AR & AP will be managed.

These are just a few of the questions to be asked when deciding to make an offer to purchase a company, you can certainly see how lengthy the process is. Be exhaustive, be diligent and don’t assume anything conveys at closing. After all, you are probably paying a hefty sum of money and incurring a liability like nothing you have experienced before. If you have questions, Valhalla Business Brokers will have the answers or we know how to get them.

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    Our Process

    1

    Goals & Discovery Meeting

    During our first initial meeting, we want to get to know you and discover what are your goals and what brings you to us.

    2

    Valuation

    We will need to see your financials, tax returns etc to get an accurate valuation on your company.

    3

    Listing Agreement

    In our listing agreement, we will formalize your goals to sale and layout all the terms. We understand this is a big decision and will be here with you all the way.

    4

    Finalize Marketing Files

    Once the listing agreement is signed we will begin to build a marketing package.

    5

    Going to Market and Fielding offers

    After we have finished the marketing files, its time for us to reach out to all our partners and the market place to find potential buyers.

    6

    Field Offers

    Our goal is to bring more than one offer to the table for you to choose from.

    7

    Due Diligence

    Once an offer has been made and accepted we will enter into the due diligence phase where we will fine-tune the offer and work closely with the buyers to develop the purchase agreement.

    8

    Close the Transaction

    During this phase we will be working very closely with the banks, buyers, sellers, and lawyers to ensure everyone has all the documents and information need to close.

    How We
    Do It

    Supercharge your business to maximize marketplace value

    • Diving deep into your business goals
    • Identifying areas for improvement to sell your business for top dollar
    • Equipping your company with the best professional partners to increase enterprise value

    Our Mission

    At Valhalla Business Brokers, our mission is to offer professional expertise and reliable service to our clients in the areas of Buying and Selling privately held businesses, Mergers and Acquisitions, affiliated Financial Support Services, including Loans, imaginative methods of Raising Capital and Cash Flow, Tax Reduction Strategies and related Real Estate services. We assist both sellers in preparing and packaging their business for marketing as well as buyers looking for a specific acquisition or merger. Our company is a fully licensed Real Estate and Business Brokerage operation with only trained professionals. Our team of expert M&A Advisers and Certified Business Brokers will help inspire, educate, and consummate a deal on their behalf.

    We are the broker of choice for North Texas and the surrounding areas. We will uphold the highest ethical standards, provide superior customer service, and continually strive to meet our clients’ professional objectives. Additionally, we commit to working with the utmost confidentiality with buyers, sellers, and their accountants, lawyers and other business partners. We understand that buying or selling a business is a deeply personal, often emotional experience and we focus on providing sincere, pragmatic advice.

    We Pledge To

    Outwork the Competition

    Negotiate Like Sharks

    Never Stop Until the Deal Is Done

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    Schedule a free consultation and learn how to sell your business for maximum value today!






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