About This Blog
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Peter Siegel, MBA is a nationally known consultant and author - with over 25 years experience on the topic of selling, buying, and niche financing (the purchase of), small to mid-sized businesses. His clients include: business buyers, business owners/sellers, small business advisors, and business brokers. |
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This Blog contains observations, tips, news, events, and case studies relating to selling or buying a small business. |
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This Blog is ideal for business buyers, business owners, advisors, business brokers & agents. |
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Contact me by phone
at 866-270-6278 |
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Disclaimer
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Opinions expressed on this site do not necessarily represent those of BizBen. |
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Opinions expressed here do not constitute legal advice. Those interested in specific guidance for legal matters should seek competent professional advice. |
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Deal And Escrow Issues
The following posts are in the deal and escrow issues category.
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Posted on October 28, 2009 Contributed by Lee Petsas
Deposits With Purchase Agreements: Rules And Guidelines
Lee Petsas, a Southern California business broker discusses purchase agreements when buying or selling a business in his new article on BizBen, "Rules And Guidelines About Deposits With Purchase Agreements". Lee discusses: How much consideration should I give as deposit? Are Deposits refundable and when? Cashing Deposits and Opening Escrow, Return of Deposit to Buyer, Why do we take a deposit from a buyer when preparing and executing a Purchase Agreement Contract?
Posted at 7:21am | 5 Comments
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Posted on October 20, 2009 Contributed by Chuck Post
Due Diligence: Buyers Role When Buying A Small Business
What is the extent of the Buyers obligation to investigate a business before purchasing it? To what extent should a Buyer rely on the Selling Broker for “decision making” information? A “Common Sense “ approach to buying a business should tell you that certain areas need to be investigated before completing any business acquisition. So why is it that so many people find out so much about the business they purchased after the closing of the escrow? Chuck Post a specialist in assisting buyers and sellers with coin laundries explores this topic with BizBen blog readers.
Posted at 8:51am | 7 Comments
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Posted on October 14, 2009 Contributed by Peter Siegel
Is Inventory Value Part Of, Or Added To The Price For A Retail Related Business?
Here’s a question posed to our panel of experts that brings up one of the more difficult issues that must be addressed when a retail store is being sold. "How do you handle the inventory amount in the valuation and price of a retail based small business? If the inventory value is high compared to the "value " of the business by itself: Do you add the inventory value to the business value? Should the owner be expected to take back a note for the value of the inventory? Our industry panel of experts respond with answers.
Posted at 7:03am | 6 Comments
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Posted on September 21, 2009 Contributed by Peter Siegel
Add Backs: What Is for Real When Reviewing Financials?
The use of “add backs” is common among sellers of small and mid-sized businesses when showing their financials and explaining that the buyer will actually enjoy more profit than is shown. But buyers are cautioned to watch out for “add backs” that are actual expenses pretending to be owner benefits.
Posted at 8:33am | 2 Comments
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Posted on August 20, 2009 Contributed by Peter Siegel
Buying A Bar: Due Diligence Issues & Tips
A BizBen blog reader emailed me this question a few days ago: "I am starting due diligence this week on buying a cocktail bar With a 48 license what should I be asking for, thinking about, watching out for? Is there a list of items I should ask for?" I posed this question to several qualified business brokers, agents, and advisors and they offered several great suggestions and ideas for this buyer to consider.
Posted at 8:40am | 1 Comment
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Posted on August 18, 2009 Contributed by Lee Petsas
Selling A Business: When And How To Tell Employees
Lee Petsas a Southern California business broker writes about his experiences relating to when to tell employees the business is for sale or has been sold. If you are thinking of or in the process of selling a small business but not sure when to approach your employees read this article for different approaches and ideas.
Posted at 8:08am | 5 Comments
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Posted on August 17, 2009 Contributed by Jeff Back
Working With The ABC: Inside Look At Liquor Licenses
What you will read in this article you will probably not find in any manual or set of instructions provided by the ABC. What I write about in this article is about the many things I have learned the hard way over 20 years of working as a restaurant broker with the ABC to transfer beer and wine and full liquor licenses. This blog post/article is written by Jeff Back a restaurant sales specialist.
Posted at 8:03am | 5 Comments
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Posted on August 4, 2009 Contributed by Lee Petsas
Allocation Of The Purchase Price In A Business Sale
There are a handful of key asset categories in allocating or breaking down the purchase price of a business during the sale process. In many instances buyers and sellers have different desires in how to “chop up” the purchase price. The allocation in required to complete the transaction. In this blog post/article Lee Petsas covers the most common used asset allocation classes.
Posted at 6:15am | 4 Comments
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Posted on July 29, 2009 Contributed by Tawnya Gilreath, CBB
How Escrow Protects You In A Business Transaction
In dealing with business sales, often times the Seller or the Buyer will ask about the use of an escrow company. The seller may say, Why can't the buyer just pay me cash or give me a cashier’s check? Tawnya Gilreath a Los Angeles County business broker discusses why it's always a good idea to utilize specialized escrow services to close a deal.
Posted at 8:29am | 9 Comments
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Posted on July 28, 2009 Contributed by Lee Petsas
Selling Your Business Note After You Sell Your Business
It definitely helps to sell your business if you carry a note for the buyer. What about selling your note after the close of escrow? Do you want to effectively “cash out” of the sale? There are companies who specialize in purchasing Business Notes (of course at a discount). You can sell all or part of your note. Lee Petsas discusses this entire process in his latest article on BizBen.
Posted at 8:05am | 4 Comments
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Posted on July 24, 2009 Contributed by Christina Lazuric
Signatures On An NDA: Question From Christina Lazuric
Christina Lazuric, a business broker in Orange County asks the questions:
1- Is it legal in the state of California to put that legal blurb in lue of a signature for an NDA. 2- Does anyone have the correct phrase?
Posted at 6:54am | 0 Comments
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Posted on July 14, 2009 Contributed by Joe D. Robertson
When Do I Tell My Employees The Business Is Being Sold?
With the multitude of factors that come into play when deciding the appropriate time to inform your employees that your business is for sale, I do not offer a standard or general answer. When sellers consult me as to my opinion on when it is the right time, I like to review the major issues that will affect the decision.
Posted at 9:36am | 6 Comments
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Posted on July 9, 2009 Contributed by Lee Petsas
Structuring Owner Carry Notes
Due to the current state of the Credit Markets and Bank Financing, Seller financing is more important then ever in facilitating the actual close of escrow in a Business Sale. Everyone is aware of the difficulties in procuring financing on small businesses these days. Everything must be perfect. At one point a few years ago I think I could have gotten my family dog a loan. Today worthy buyers are still getting rejected. The bail out has not reached Main Street. Lee Petsas, business broker walks us through the nuances of owner carry notes - i.e. seller financing.
Posted at 6:25am | 5 Comments
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Posted on June 23, 2009 Contributed by KC Choi
How Is A LOI Different Than A Purchase Agreement?
While a purchase agreement is a binding contract with rights and obligations for each party that contains all the terms and conditions of the transaction; a preceding Letter Of Intent (LOI) is often overlooked for its significance. Business broker, KC Choi explains the difference between an LOI and a purchase agreement in this BizBen article.
Posted at 8:58am | 4 Comments
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Posted on May 21, 2009 Contributed by Peter Siegel
Owner Asks: Good Time To Sell With Lease Coming Up?
A potential small business owner/seller asks the question: I have a preschool and am thinking about selling it but my lease is ending soon. What would be the best thing to do? Do I renew the contract or do I act the landlord to sign a contract to the new buyer? and is it a good time to sell?
Posted at 7:40am | 4 Comments
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Posted on May 5, 2009 Contributed by Peter Siegel
Seller Training: An Overview About This Provision
Seller training from a business owner after a sale of a business can mean all the difference to a buyer and how successful the transition. This article by Peter Siegel of BizBen talks about different aspects of seller training after a small business has been sold.
Posted at 5:42am | 2 Comments
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Posted on April 21, 2009 Contributed by Joe Ranieri
Life (or Death) Of An Orange County Restaurant Deal
Any deal when selling a business tends to have a life of its own. Joe Ranieri discusses a restaurant deal in Orange County that has had many twists and turns. This article shows what types of issues can and do come up when selling a business or in this case a restaurant.
Posted at 8:08am | 2 Comments
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Posted on April 14, 2009 Contributed by Tawnya Gilreath, CBB
Errors Buyers Make When Searching To Buy A Business
Often business buyers actions cause a deal to tank but they never know why. Tawnya Gilreath a Los Angeles County business broker discusses what mistakes business buyers make in the search process to buy a business and provides an outline of what behavior is best in dealing with business brokers and owners.
Posted at 10:05pm | 2 Comments
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Posted on July 7, 2008 Contributed by Willard Michlin
Dealing With Business Brokers: One Brokers Perspective
Willard Michlin a due diligence specialist in Southern California discusses how many business buyers feel "pushed around" by business brokers / intermediaries and what they should do about it when it happens.
Posted at 10:17am | 0 Comments
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Posted on June 15, 2008
Conducting Inventory: Final Steps Of Closing A Deal
One of the final steps in closing the sale of a California business is conducting the inventory of stock, materials and supplies, and then determining its value.
Posted at 10:38pm | 0 Comments
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Posted on May 15, 2008
Refer a Client, Drive a Ferrari
Here's a way to get lawyers and accountants to send you a client who wants to sell a business. Offer these professionals the use of your $200,000 sports car!
Posted at 7:02am | 1 Comment
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Posted on September 30, 2007
50% Of Deals Fall Out: Coffee/Tea Store Back On Market
I always advice business owners who are in escrow or in the "contract phase" of selling their business to make sure they have back-up buyers since 50% of all deals fall out.
Posted at 8:55pm | 0 Comments
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Posted on September 15, 2007
Work In Progress/Transition Issues Stump Business Buyer
Work in progress and transition situations must be handled within escrow. We look at some solutions from some of the top California business brokers in todays BizBen blog concerning a question a business buyer has during the purchase of a bakery.
Posted at 2:01pm | 0 Comments
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