How should the purchase of a business be structured? This is a point that you’ll want to address early in the sale process. For most people, buying or selling a business is one of the most, if not the most, important business decisions that they will ever make. Therefore it is vital not to wait until the last minute to structure your deal. Let’s turn our attention to the most significant questions that you need to answer when entering the sales process.
1. What is My Lowest Price?
Ask yourself “What is the lowest price I’m willing to take?” If your get an offer, you don’t want to sit around trying to decide if you can take a given offer at a given price. You should be ready to jump if the right offer is made.
2. What are the Tax Implications?
Seriously consider the tax consequences of any sale. Taxes are always a fact of life, and you need to work with a professional, such as an accountant or business broker, to understand the tax implications of any decision you make.
3. What are the Interest Rates?
If you get a buyer, what is an acceptable interest rate for a seller financed sale? Working with one of the GABB’s affiliate lenders is a great way to find the most attractive interest rate.
4. Are there Additional Costs Involved?
Do you have any unsecured creditors that have not been paid off? Additionally, you’ll also want to determine whether or not the seller is willing to pay for a part of the closing costs.
5. Will the Buyer Need to Assume Debt?
Finally, will the buyer need to assume any long-term or secured debt? The issue of long term and/or secured debt is no small issue. Be sure to clarify this important point well in advance. Also keep in mind that favorable terms typically translate to a higher sales price.
Business brokers are experts at buying and selling all kinds of businesses. When it comes time to structure a deal that benefits both the buyer and the seller, business brokers are invaluable. At the end of the day, working with a business broker is one of the single biggest steps you can take to ensure that your business is sold for the most attractive price and sold as quickly as possible.
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