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investing, buying or selling a business

Often buying or investing in a business can prove to be a complicated process, in particular for first timers. Our commercial solicitors can provide you with guidance.

investing or buying
a business

If you are an investor and considering buying a share of a business there are a number of factors which you should bear in mind. When presented with a commercial offer, before signing the deal you should be aware of the types of issues that you can negotiate on. To begin with you may look at the level of contribution you will bring to the business, whether solely financial or more hands on. This enables you to become aware of what you are looking for in terms of negotiation and it will become much easier to make a sound investment.

It is prudent to initially complete some groundwork. You should learn as much as possible about any potential investment, and carry out investigations into the people involved in the business and retrieve any relevant financial data or accounts available. By equipping yourself with these details you can make an informed decision on whether the investment is likely to be a fruitful one and how it performs in comparison with any competitors in the same market. This also allows you to anticipate the possible return on investment and foresee how your investment may be utilised. You may also wish to ask if a viable business plan is in place. Another key consideration is the people involved in the business. Knowing the key individuals who are responsible for day to day operations, you can get fuller understanding of the company constitution.

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selling
a business

Having committed considerable time and effort to setting up and running your own business, when the time comes that you wish to sell on your business, you should ensure that you are fully informed, so that you can gain the maximum possible price before moving on to pastures new. You may find that choosing the correct time to sell your business is greatly influenced by market conditions. Such indicators may include the financial climate, any market trends in your particular line of business and potential buyers available. Firstly you should set out your ultimate objectives which may include, what price you would like to achieve, when you would like to sell. You should then work backwards to establish how you might achieve your aims. Your goal is to build a valuable, viable business which will appeal to potential buyers.
A starting point is to look at the basics.

Getting the basics right should make selling your business easier. This may include having evidence of a solid customer or client base, strong brand and good reputation. If your business is heavily reliant on one person or customer, it may be more difficult to sell. Showing that you have strong structures and processes in place to cope with changes in demand or personnel. You may also look at your cashflow and identify methods used to improve the cash flow. The key consideration for any purchaser is likely to be the current profitability and potential return on future investment.

our
buying, selling & investing
experts

w (4)-min

Martha Clark

Partner

t (6)-min

Liza Lynch

Accredited Paralegal