4 Questions to Ask When Buying or Selling a Small Business
Planning a small business is no easy feat. Search online for “small business planning,” and you’ll be inundated with information. Sorting through all this information can be a daunting task, which is why seeking guidance from small business planning specialists can be helpful.
At Niswanger Law in West Monroe, LA, our business planning specialists can provide valuable guidance to help you plan and launch your business. We have experience helping entrepreneurs in various industries, and we understand the unique challenges that small businesses face.
To give you a head start, we’ve highlighted some of the most important points to consider when planning a small business. Focusing on these key areas can create a solid foundation for your business and increase your chances of success.
1. Is It Prudent to Consult With a Business Law Attorney?
Indeed, it is in your financial interest to consult with a business law attorney before buying or selling a business. Acquiring or selling a business in a DIY (do-it-yourself) manner will backfire simply because there are legal nuances involved in the process.
The legalese of the contract alone used to purchase or sell the business shapes the transaction’s outcome. Failing to include even a single clause or stipulation can lead to litigation, financial loss, and the closure of the business or a failure to consummate the deal.
Niswanger Law in West Monroe, LA is here to create such contracts on your behalf, modify them during negotiations, and finalize those agreements to safeguard your financial interest.
Our business law attorney will provide guidance about financial documents, including the business’s bank statements, tax returns, and more. We can even help in the quest to reach an advantageous or, at the bare minimum, a mutually beneficial sale/purchase price.
2. Does It Make Sense to Purchase an Existing Franchise?
This is one of the most important questions. Buying a small business or becoming a franchisee of an existing business poses financial and legal hurdles that an entrepreneur cannot surmount on their own.
Franchises are authorization provided to a person or group by a business entity, empowering the individual or group to use, advertise, or sell specific equipment or other items from the business. The guidance of a business law attorney in West Monroe, LA is essential for creating a franchise agreement that provides beneficial permissions pertaining to the business.
3. When is the Optimal Time to Sell?
Though your business law attorney cannot predict the future, this professional’s guidance will help you pinpoint the best time to sell your business. Generally, the best time to sell a business is when there is minimal risk, meaning the business is not saddled by an egregiously large debt load, is not embroiled in litigation, and is not susceptible to bankruptcy.
The adage “buy low, sell high” applies to business. If your business is raking in the revenue and anticipates a sizable profit in the years ahead, the time might be right to sell. When in doubt, lean on your business law attorneys at Niswanger Law for guidance.
4. What is a Fair Amount to Pay for a Business?
Those in the market to buy a business are advised to do their due diligence. However, if you are like most people in West Monroe, LA, you are busy with personal, family, and professional matters that preclude a deep dive into the nuances of purchasing a business.
The sum of money you pay for a business should be shaped by the following factors:
- The state of the local economy
- The sale prices of similar businesses in the area
- The value of the business in question
- The business’s debt
- The location of the business
- Financial liability stemming from current or past litigation
- The number of buyers and their respective financial contributions
Got More Questions? Ask Our Business Attorneys at Niswanger Law
Whether you’re starting a new business or looking to expand an existing one, our team can help. We’ll work with you to create a customized plan that addresses your specific needs and goals. With our guidance, you can navigate the complexities of small business planning and achieve your dreams of entrepreneurship.
You can schedule an appointment by dialing (318) 953-0071. Or visit our office located at 3814 Cypress Street, West Monroe, LA 71291.