The articles are provided for information purposes only, and are not intended as legal advice.


In Ontario and British Columbia, HST will be implemented effective July 1.  Many different products will be more expensive now that they were in June prior to the implementation of the HST.  Will that affect the value of your business for sale? (more…)


The articles are provided for information purposes only, and are not intended as legal advice.


The BP oil spill has not been contained and oil could continue to leak for another few months.  If there is a tropical storm or hurricane and a storm surge brings the oil inland, what will that do for business or real estate?  Are people starting to panic? (more…)


The articles are provided for information purposes only, and are not intended as legal advice.


Normalized earnings is the profit that would continue to the new owner after the old owner left the business.  In theory, it is the profit after the owner is paid a reasonable salary that would be earned after the business is sold.  What should be factored into this calculation?  There is no standard of what to include and not to include the businesses is becoming more international, there are many more things affecting a business.  Should you consider them before offering a price for the business for sale? (more…)


The articles are provided for information purposes only, and are not intended as legal advice.


Many businesses buy and sell products from foreign countries.  They may buy from one country and for example export to the United States.  What happened if the old owner of the business purchased foreign exchange contracts to cover his/her exposure to fluctuations in the exchange rate.  If he bet properly, he/she saved a lot of money.  If he/she made a wrong guess and it cost the company money, is the error part of normalized earnings? (more…)


The articles are provided for information purposes only, and are not intended as legal advice.


You have decided to buy a business, you have been thinking for months that this is something that you would like to do.  You have been searching for businesses on www.thebusinessplace.com and now you have found a business which sounds interesting.  Now what, how do you proceed? (more…)


The articles are provided for information purposes only, and are not intended as legal advice.


You want to buy a business but do not want to over pay.  How do you minimize the risks of over paying?  Many people can relate better to the real estate market.  In Canada, we know that interest rates will increase in the summer, there are new rules for people borrowing money and HST will be implemented on July 1 in Ontario and BC.  Everyone knows that this will impact us but no one understand the exact impact yet.  As a result, sellers are trying to get rid of their houses now.  One person last week made a prediction that he believes that house prices would drop by 20%.  How does this impact businesses for sale? (more…)


The articles are provided for information purposes only, and are not intended as legal advice.


When you are buying a business for sale, the vendor has come up with a selling price.  How do you know it is a reasonable price?  When you are looking to purchase a house, there are lots of other houses in an area which may be similar to your house therefore you have an idea of what your house is worth.  If however, you have a custom house and it is on a bigger lot and your house is considerably larger than anything in the area, how do you value the house?  You need to do more work to try to determine what a comparable house would be to determine your asking price.  In business, every business is different.  A business may look like another, for example a franchise, but each franchise has a different value because sales and profit are different.  Businesses are much harder to value. (more…)


The articles are provided for information purposes only, and are not intended as legal advice.


The governments of many countries are trying to improve the fortunes of their domestic economy by implementing a stimulus program.  This is a program aimed at local spending of many different items including, roads, transportation services and other infrastructure projects.  This generates a huge amount of government spending in a relatively short period of time.  If the business which you want to buy is affected positively by the stimulus package, how do you value the business? (more…)


The articles are provided for information purposes only, and are not intended as legal advice.


You have been looking to buy a business and have not been able to find one for a long time.  What do you do – what until prices come down or buy a business now?  I tell investors that if you are buying your first business, it often takes twelve months before you close your first transaction.  Why so long?  At first, you do not know what you want, you look for several months to find out what is out there.  Then you negotiate, put together a letter of intent, that can take 2 weeks to agree to terms, then you need 2 weeks to do  the due diligence, then it takes 2 to 3 weeks for the lawyer to prepare the purchase and sale agreement.  Basically, once you find the right business, it takes 6 weeks to 2 months or more to close the transaction. (more…)


The articles are provided for information purposes only, and are not intended as legal advice.


You have been debating on buying a business but can’t find any available that meets your criteria.  You are frustrated because you desperately want to find something but can’t find anything.  What do you do?  Let’s digress and look at the real estate market at the moment.  In some cities such as Toronto, there is an extreme shortage of houses.  It appears that everything that is listed gets sold very quickly.  As a result, anyone who is selling a house today keeps increasing the price because they believe that someone will pay the asking price.   Eventually, the house will become over priced and it will sit on the market.  All reasonably priced houses sell almost immediately.  Is this different that buying a business?   Not at all but investors do not draw an analogy between the housing market and buying a business. (more…)


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