Continued from “Buying a Small Business in 2012, Part One”.
You’ve now identified a business opportunity and completed a tour of the business facility. The seller’s answered your initial questions and provided you with business financial information. Once you review the income statements, balance sheets and tax returns, you can decide if you want to make an offer. There are two ways to communicate the offer to purchase the business. You could choose to utilize a contract or binding agreement or you could utilize a Letter of Intent or non-binding agreement. A contract must be written by an attorney and immediately binds you and the seller, and will require submission of earnest money. You’ll include certain contingencies in the contract that must be satisfied and the contract’s highly definitive. (more…)