<\/i> Set out expectations for the seller’s responsibilities after closing, such as training of the
\npurchaser or continuing employment.<\/li>\n<\/ul>\n<\/div>\nYour broker will make sure you are protected and the offer will be conditional upon structuring the transaction and drafting an agreement of purchase and sale that is acceptable to both parties and their legal advisers. The offer will be conditional upon financing on terms acceptable to the purchaser and upon completion of due diligence-financial diligence, operational diligence, market diligence, legal diligence, and so on-to the satisfaction of the purchaser.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”About Purchasing Assets or Shares” tab_id=”how-to-determine-if-the-seller-is-reporting-all-income”][vc_column_text]Buyers usually prefer to purchase the assets of the business-intellectual property, the right to use the name, telephone number, websites and all the tangible assets. If purchasing the assets at market value we may be able to achieve a greater depreciation expense going forward and reduce taxes in future years.<\/p>\n
If we purchase shares rather than assets we inherit liabilities. An audit next year of last year’s tax return and financials may result in a liability to Revenue Canada. A previous employee may sue the company for wrongful dismissal or for an injury sustained on the job. There may be product liability issues.<\/p>\n
Sellers tend to prefer a share purchase. Provided their business qualifies, this structure enables them to take advantage of the $892,218 (in 2021) capital gains exemption and potentially save considerable taxes.<\/p>\n
We may be prepared to accept the possibility of hidden liabilities if the seller is prepared to provide significant financing for our purchase and we include a right of offset in the note. To some extent this will depend upon the exposure and risk we are assuming. If the seller has been conservative and meticulous in their record keeping and taxes, we are in a position to negotiate the structure of the transaction. For instance, in return for us agreeing to accept a share structure, we may negotiate increased financing from the seller and, perhaps, a lower price. This enables us to share in the benefit the seller achieves through a share sale.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Negotiating the Offer” tab_id=”how-long-have-you-been-thinking-about-buying-a-business”][vc_column_text]We have now received a counteroffer and are into negotiations.<\/p>\n
The negotiations will be conducted through our business broker-not directly, your broker will guide you through the process with advice and impartial sober thought.<\/p>\n
We need to understand what is behind the seller’s changes-he or she may have changed the structure of the purchase from assets to shares.<\/p>\n
Everything is negotiable BUT our goal is to acquire a business on price and terms that enable us to earn sufficient income to support our family, to service the debt to pay for the business over a reasonable period of time and to provide a return on our invested capital.<\/p>\n
We must be prepared to walk away from the opportunity if we cannot negotiate terms that work for us.
\nOffers may move back and forth multiple times-each time you will learn something further about the seller’s priorities and concerns. Once you have agreement, it is time to start the next phase, which includes planning due diligence and arranging financing.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Conducting Due Diligence” tab_id=”what-is-your-time-frame-to-find-a-business”][vc_column_text]We must now plan and execute a reasonably thorough analysis of the business and the information provided. Our goal is to identify any fatal flaws, verify that the information is reasonably accurate and confirm that this business will really work for us. Professional advisers can assist us with this process, called due diligence.<\/p>\n
A diligence plan will be provided by your broker and they will coordinate its execution, but it is your responsibility as the purchaser to carry out to your satisfaction.<\/p>\n
You will likely want to have an accountant help verify cash flow, assets, liabilities, financial history, projections and review tax filings, associated risk, corporate structure and potential tax issues resulting from our purchase.<\/p>\n
An experienced tax and transaction lawyer will advise us on the risks and the structuring of the transaction and the business after our acquisition. They will also review the ownership and transferability of the intellectual property.<\/p>\n
We must confirm that the business can generate sufficient cash flow to 1) support us, 2) do the debt servicing to pay for the business over a reasonable period of time and 3) provide a return on our invested capital. If it is falling short, we must have a vision of the changes we can make to ensure it meets these needs in the future.<\/p>\n
The list is longer and more detailed than discussed above, however you get a sense of the scope involved. The due diligence process can take anywhere from two to six weeks depending on the complexity and availability of documentation.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Managing Risk and the Feeling of Buyers Remorse” tab_id=”what-is-your-primary-reason-for-buying-a-business”][vc_column_text]Keep in mind that there will always be some risks and that you are the buyer-not your accountant or lawyer. Listen to their advice and that of your business broker but the decision is yours. I have rarely heard an accountant or a lawyer recommend that a buyer proceed with an acquisition. Their job is to keep you from making a mistake or taking undue risk. The only way to avoid risk is to do nothing. You must decide if the risks are acceptable.<\/p>\n
Expect buyer’s remorse-it will set in about two weeks before closing. You will be nervous about the cash flow, about the impact on your lifestyle and about your ability to successfully manage and grow the business. This is perfectly normal and part of a healthy process. Talk it through with your business broker.<\/p>\n
Likewise, the seller will be experiencing seller’s remorse. They will be nervous about your ability to successfully operate what has been their business. They will be nervous about the change in their lifestyle and worried about the financing they are providing to you. They may find it emotionally difficult to let go of their “baby.” This may be a good time to touch base with the seller and your broker. Your job will be to calm the concerns of the seller.<\/p>\n
Their job will be to calm your concerns. Everyone’s goal is to make sure this is a successful win\/win transaction.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Closing the Deal” tab_id=”are-you-willing-to-invest-a-majority-of-your-liquid-assets-in-a-business”][vc_column_text]You are satisfied that this business will work for you. Your business broker will work with you and your lawyer on the legal diligence, which includes:<\/p>\n
The Agreement of Purchase and Sale (drafted by your lawyer), the non-compete non-solicit agreement that the seller will sign, and the training and transition agreement, the terms of the seller financing note, title verification of the assets. For a more complete view we invite you to get a copy of Insider Tips on Buying a Business in Canada from our corporate site.<\/p>\n
Through all of this, your business broker will work with you and the lawyers to manage any items that may create misunderstanding and impact the closing of the deal. It is important to work with a lawyer experienced in business transition.<\/p>\n
Through closing you will also be assuming a lease if there is one, finalizing the financing for the purchase and operation of the business, and confirming assets and current inventory.<\/p>\n
Expect some post-closing adjustments, this will be dealt with about 45 days after closing when you have received all of the invoices for services provided up to the date of closing.<\/p>\n
Now you are the ready to be the business owner![\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Meeting the Staff” tab_id=”are-you-independent-enough-to-make-your-own-decisions-and-be-in-control”][vc_column_text]You also need to meet with the staff to advise them of the transfer of ownership and alleviate their fear of change. This is best done accompanied by the seller. I have found that most employees are pleased at the change of ownership. The previous owner may have had health issues, been “coasting” or lost the passion. In such cases change is welcome if presented in a positive manner.<\/p>\n
I do not recommend telling employees about the sale until after closing. Too many things can go wrong and you don’t want to create fear of the unknown. If your purchase was conditional on retaining key employees you would have met with them prior to closing, however they would have committed to keeping the pending transaction confidential.
\n[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Now You Own the Business” tab_id=”is-your-family-supportive-of-your-owning-a-business”][vc_column_text]You have just purchased a business. Your first goals are to:<\/p>\n
\n
\n- <\/i> Learn as much as you can from the previous owner,<\/li>\n
- <\/i> Build positive relationships with suppliers and clients,<\/li>\n
- <\/i> Understand the current systems and processes that drive the business,<\/li>\n
- <\/i> Get acquainted with staff and consultants\u2014their individual needs, strengths and preferences.<\/li>\n<\/ul>\n<\/div>\n
Do not make significant changes in the business operations until you understand why things are done as they are now. This generally takes a few months.<\/p>\n
These steps may seem overwhelming, but you do not have to do them all at once. With quiet confidence, and getting something done each day that moves you in the right direction, you will get there. And as you progress, the pace of accomplishment will increase. It will seem slow slogging at first, but as you and those around you see small steps being successful, the momentum builds to a rapid pace of business improvement.[\/vc_column_text][\/vc_tta_section][\/vc_tta_accordion][\/vc_column][\/vc_row][vc_row full_width=”stretch_row” content_placement=”middle” css=”.vc_custom_1621860068102{background-color: #f9f9f9 !important;}”][vc_column width=”1\/2″][vc_column_text]\n
Do you have other questions?<\/h3>\n
Be sure to visit Buyer FAQs<\/a> for answers to the following questions.<\/p>\n\n
\n- <\/i> Why should I buy a business rather than start one?<\/li>\n
- <\/i> What is the real reason people go into business for themselves?<\/li>\n
- <\/i> How are businesses priced?<\/li>\n
- <\/i> What should I Look for?<\/li>\n
- <\/i> What does it take to be successful?<\/li>\n
- <\/i> What happens when I find a business I want to buy?<\/li>\n
- <\/i> Why should I go to a business broker?<\/li>\n
- <\/i> Do I need an attorney?<\/li>\n<\/ul>\n<\/div>[\/vc_column_text][\/vc_column][vc_column width=”1\/2″][vc_single_image image=”1596″ img_size=”full” style=”vc_box_rounded”][\/vc_column][\/vc_row][vc_row full_width=”stretch_row” gap=”35″ equal_height=”yes” content_placement=”middle” css=”.vc_custom_1620134874002{margin-bottom: -40px !important;}”][vc_column width=”2\/5″][vc_column_text]\n
Are you interested in our Businesses for Sale?<\/h2>\n[\/vc_column_text][vc_column_text]Begin your search for the ideal business opportunity viewing our latest listing or browse the whole collection from link bellow.[\/vc_column_text][vc_btn title=”View our businesses for sale” style=”outline-custom” outline_custom_color=”#336699″ outline_custom_hover_background=”#336699″ outline_custom_hover_text=”#ffffff” align=”left” i_align=”right” i_icon_fontawesome=”fas fa-angle-double-right” add_icon=”true” link=”url:%2Fatlantic%2Fview-businesses-for-sale%2F”][\/vc_column][vc_column width=”3\/5″][vc_column_text]\n\n\n\n\n\t\n\t\n\t\t
No items found<\/strong>\n\t\n<\/div>\n[\/vc_column_text][\/vc_column][\/vc_row]\n<\/div>","protected":false},"excerpt":{"rendered":"[vc_row gap=”35″ content_placement=”middle”][vc_column width=”1\/2″][vc_column_text] How to Buy a Business in Atlantic When considering how to buy a business it is important to know that you are getting into a business that suits your needs and produces solid reliable earnings. We will guide you through your purchase with a proven process and help you make the right choices to find a business that is right for you. You will likely have many questions. What is a good business for me? What businesses can I afford to buy? Will this business provide the income I need to support my life? Which type\u2026<\/p>\n","protected":false},"author":105,"featured_media":1604,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-1520","page","type-page","status-publish","has-post-thumbnail","hentry"],"blocksy_meta":"","yoast_head":"\n
How to Buy a Business - Sunbelt Canada Atlantic<\/title>\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n\n\n\n\t\n