Yearly Archives: 2010

Your business is for sale and you are planning your next adventure.  What is reasonable for a buyer to expect you to not do? In a boilerplate offer I have, the text reads "COVENANT NOT TO COMPETE. Seller hereby agrees not to engage in any business or activity anywhere in the United States, directly or indirectly, as an owner, employee, consultant, or otherwise, which competes with Purchaser’s operation of the Business for a [...]

My editor husband would say, “You don’t grow a business.  You develop a business.” One of the goals a business owner might explore is that of selling the business for more than it was purchased for.  Buying right, at a discount, or increasing the net to owner can achieve this. Since selling a small business is usually based on cash flow to owner, to sell it for more means you need to develop [...]

Dakin Business Group, co-sponsoring with Cole Financial Services and Kanaly Trust, recently held a seminar focused on the business owner's business investment as a piece of their entire portfolio...looking for balance.  At the beginning of the seminar, we asked the participants to identify why someone wants to own their own business. Psychic reasons: Satisfaction of building and owning your own: Love it and have fun! Be part of the community: Freedom & flexibility: [...]

Don't underestimate the inventory process in a business-for-sale transaction.  It can be daunting, contentious, and a deal-breaker. The inventory process can be done by any number of people.  It can be seller and buyer, employees, hired counters.  The more vested the individuals in the process, the more accurate the count.  Having people count in twos, one calling out and one writing down is a handy method, helping to speed the process.  Obviously, in [...]

Got your attorney and accountant all ready, do you?  In any transaction business-for-sale transaction, the closer you get to having a transaction completed, the more time you may want to spend with your personal business attorney and accountant and more need there is for asking well in advance for their time. As due diligence is performed, documents created, closing approaches with the myriad of forms to sign, it is likely you will want [...]

In a (real estate/business) sales class, the example of cows for escrow came up.  The lecturer used cows as an example of possible escrow.  It was a true story.  This is New Mexico after all. In fact a number of things can be escrowed.  In the example being used in class, the cows’ owner wanted to buy something and had to put up escrow.  He did not want to sell the cows unless [...]

When you are buying / selling a business, when are you ready to close? Sometimes the answer is NEVER!  In some cases, everything seems to be moving just as it should and then the littlest but most significant piece is undone and can not be gotten over.  Perhaps it is the transfer of the phone number.  The buyer obviously wants, and usually needs, it and the seller can't part with it because Mom [...]

Today I was speaking to a gentleman looking for a business to buy.  He was lamenting his experience of having to dig out the problems during due diligence in case after case.  Then walking away from the deal because it was not as it originally appeared.  On the one hand he was apologizing for all of his questions but knowing that he had to ask. A business broker typically appraises the business on [...]

In many small-business-sale transactions, an asset sale is the method.  The buyer is buying the name, phone/email/etc numbers, goodwill, inventory but not receivables and payables.  As the transaction approaches, closing buyers and sellers begin to think of the reality of the receivables.  Can the seller really collect after the business is no longer there and do they really want to?  The payments are likely to come to the same old address no matter [...]