Typically, if you sell a business, the buyer of the business will look at historical financial statements. The current economic downturn is affecting many companies and may continue to do so for some time in the (more…)

I just spoke to an owner who was looking to sell their property.  It had been for sale for two years with very little activity.  I asked some questions about the purchase price – how did you decided the selling price.  I (more…)

Once you have found your ideal business that you want to purchase, you will issue a letter of intent.  Usually this is a non binding document which identifies in generalities what you are buying and how you are (more…)

Unless you have the expertise yourself, it is prudent to use outside help when buying a business.  If you buy the shares of a business and you are become liable for liabilities which you were not aware of – if you did (more…)

When you purchase the assets of a business, you must allocate the purchase price.  It is advantageous to allocate the purchase price to items which provide the higher write off.  For example, only 50% of the (more…)

If you purchase the assets of a company, you get what is in the purchase and sale agreement.  if you thought that something was included but it is not in a closing schedule of the purchase and sales (more…)

When you purchase shares of a company, you are acquiring all of liabilities of the company.  This includes current, future, unrecorded and tax liabilities.  If you acquire a company which has unreported income – i.e. (more…)

There are various methods of valuing a business, discounted cashflow for larger companies but many people use multiples of normalized earnings for valuing smaller businesses.  Normalized earnings is net (more…)

How do you determine if you are paying too much for a business?  When you buy a house, you can see what other houses have sold in the area but in a business, many businesses are private and you may not be able (more…)