Hiring a business broker San Diego is the first thing you need to do when you want to buy a business. The reason for this is because a business broker has the professional connections and experience needed to help you navigate the challenges and find the business that is an ideal fit. All in all, you need to understand the steps that are involved in the purchase. Here is an overview of the basic steps.
Build your team
You need to bring together a reliable team to help with the purchase. In addition to finding the best business brokers San Diego, your team should include a transactional attorney, and a wealth manager. The expertise of your team members will dictate the likelihood of a successful future transaction.
Inquiry and screening
After identifying a great business for you to buy, you can proceed with the inquiry and screening. This process starts with the signing of the NDA (non-disclosure agreement). Your financial capabilities will be looked at in this stage. To smooth things, get prequalified if you plan on getting a loan.
Request for an independent valuation report
Just because the seller has provided you with a business valuation report does not mean you can’t perform your own valuation. Your business broker will be happy to offer an independent valuation report. This report helps you confirm the figures provided to you by the seller. It can also help you identify flaws that the seller neglected.
Meeting with the seller
Now is the time for negotiations. Your San Diego business broker will come in handy at this point. This stage involves discussions with the seller. Time will also be allowed for due diligence. In most cases, the business broker will handle everything so that you never have to meet up with the seller unless it is absolutely necessary.
Letter of intent
If you are still interested in the purchase, you need to submit your letter of intent (LOI). This outlines the structure of the deal and key terms which include transaction timeline, purchase price as well as the allowed time for due diligence. You will be required to put a deposit into an escrow account.
Closing
Many things happen in closing. The main tasks include lease transfer, setting up the new business entity, securing financing, contract assignment, licensing transfer, and so much more. Closing takes place after the transfer of the final payment which is distributed by your transactional attorney.
Training and transition
Depending on the nature of the business, training and transition time might be needed. The business owner will call a meeting to inform the employees of the change in ownership. A training period will start soon after closing and will last as long as stipulated in the Letter of Intent.
Buying a business is easy when you have the right team on your side. Always make sure that you have a reliable business broker San Diego to help with the transaction.