BUYING OR SELLING A SMALL BUSINESS

There are many pitfalls in both buying or selling a small business. Accordingly, you should seek professional assistance in doing either. Although our Chapter offers a workshop on “Buying and Selling a Business”, we strongly recommend that you also seek the help of a SCORE Counselor.

A beginning step is identifying and gathering all the information that is needed to make a proper valuation of the business possible. Financials, tax returns, agreements, leases, litigation, sales or purchase contracts, inventory status, equipment condition and many, many more items are needed to effectively determine whether the business is worthy of buying or to prove it is worthy of selling.

There are “skeletons” that must be identified, such as unresolved tax matters, unsettled lawsuits, possible liability claims and more. In addition, all buying and selling of businesses involve tax implications which should be understood at the beginning.

Buying or selling a business involves the valuation of the business using one or more techniques that have been tested in the business forum in the past. Often the buyer or the seller has an incorrect and probably unsupported view of what the business in question is worth. Help in this area is essential.

Final analysis . . . seek help! Start with a SCORE Counselor.