Starting a new business from scratch almost always requires a lot of hard work. From building a customer base to hiring and training employees, the list of tasks one must complete to get a new company off the ground is seemingly neverending. As such, it is no surprise that tons of San Diego entrepreneurs prefer to purchase existing businesses rather than building one from the ground up. This post discusses how to buy a business as opposed to starting one.
If you too are considering buying a currently-trading company, the following steps will help accomplish your goal:
Find the Right Business
The first step on the path to purchasing an existing business is almost always locating the right one for you. Ideally, you should try to pick one that is likely to be available for sale at a price that is within your budget and is a good fit for your experience and skills.
You do not necessarily need to purchase a business that has a track record of success. If you are confident that you have the ability to turn a company’s fortunes around, you can also opt to buy one that is currently struggling.
Carry Out Your Due Diligence
Once you have selected the business you would like to target, you must next approach the owner to express your interest and ask to carry out some due diligence before making a firm offer. You may be asked to sign an intent-to-purchase document at this point. If you are not comfortable making this approach on your own, you can choose to have a broker or California business lawyer act on your behalf.
During the due diligence stage, you will take a look at the company’s books and legal documents. You will want to check with the Secretary of State to ensure there are no pending issues. You will review their assets and liabilities and make sure that they have all of their licenses and permits in order. It is generally advisable to have an experienced accountant and attorney help you with the due diligence process.
Negotiate a Deal
If you are still interested in purchasing the business after completing your due diligence, you will next need to negotiate the terms of the deal with the current owner. Aside from the price, you will also need to discuss the equipment, vehicles, and property that will be included in the deal.
If you would like some help with the negotiation phase, you can enlist the services of a business attorney in San Diego. Your lawyer will be able to use their experience and expertise to land you the best deal possible.
Finalize the Paperwork
Once the specifics of the deal have been hashed out, the only thing left to do is formalize the purchase. You can do this by having your attorney draft a business purchase agreement for both you and the seller to sign.
If the company you wish to purchase operates in a highly-regulated sector, you may also have some industry-specific paperwork to complete as part of the buying process. Your attorney will be able to advise you on the specific documents you must complete and sign.
A California Business Lawyer You Can Count On
The process of purchasing an existing company can be long and complicated. If you need a business attorney in San Diego to walk you through how to buy a business, please do not hesitate to contact the experienced legal team here at the Semanchik Law Group. You can reach us at (619) 535-1811.