You found the business that seems to be a great fit for you. Congratulations! You have taken the first step toward business ownership. We get that you worked to seek, find and mull over your business opportunity. But besides the price there is a lot to consider when negotiating to buy a small business.
Get Represented When Negotiating to Buy a Small Business
Buying a small business isn’t a small matter. Even when you know you want to buy one, there are other deliberations to make. If you have questions about any part of the process, you should protect yourself by consulting an experienced lawyer. Large businesses have their own legal team on staff, but you don’t have to go it alone if you don’t. The Finman Law Firm helps Houston area small and mid-sized businesses on various legal matters every day.
We help in making critical decisions on business purchase, formation and entity choice as well as a multitude of other matters. In fact, the services we provide to small businesses cover the extent of business law requirements. Whether you are considering a business purchase, invoice collections or other, contact The Finman Law Firm for your free consultation.
Contract Negotiation, Drafting And Review
Any time two parties must decide on the terms of an agreement, contract negotiation is in play. It could involve, negotiating to buy a small business, a routine transaction negotiation or anything in between. The other party will employ tactics to come out ahead in all of these. It’s smart business practices to have a representative and strategies of your own ready to use.
Anyone who with access to funds can buy a small business, and they can certainly conduct their own negotiations. Still, anytime one party wants to buy, the other party is likely to use that desire to out-barter them. Having an objective third party negotiate the transaction eliminates emotion-based, unreasonable purchase details.
Breaking Down the Steps of Negotiating to Buy a Small Business
The Finman Law Firm follows a process when negotiating to buy a small business, from negotiation preparation to closing the transaction.
The Importance of Preparation When Negotiating to Buy a Small Business
Preparation includes becoming familiar with the background of the company for sale. Knowing the true value of a business must involve a look at that businesses standing and performance.
Clarifying the Details
We’ll review the seller’s terms and conditions line by line until it is clearly understood by both parties. We’ll then follow up to make sure those terms and conditions are entered into the final agreement. We verify dates of enactment and repercussions for breach of contract. Since the devil is in the details, a lawyer who understands the importance of minutiae can save time, frustration and money.
The Right Amount of Pressure
A good transaction results when both parties are motivated to execute a fair agreement. While high pressure can suspend the transaction, the right amount of pressure can bring all parties to the table for completion. We know the right amount of pressure.
Concessions seems like a bad word to some. However, if negotiations appear to reach a stalemate, the right concessions can push the transaction forward. Ideally, these concessions would benefit the seller, without great cost to you, the buyer. The sell may then offer their own concessions. Once the ice is broken, an agreement can be executed.
The Decision to Close
Even after all the major issue are worked out, the decision to complete the purchase of a small business is yours. Negotiators sometimes create a time limit. They might claim they have a meeting to get to or a plane to catch by a certain time. This is an indication they feel the negotiation time is done. You can either close the transaction with an acceptable offer, or make an unreasonable offer and walk away. Either way, the process of negotiating to buy a small business has run its course.
Please note: The following article is not intended as legal advice, but is solely intended for informational purposes only. To get more information on negotiating to buy a small business and other business law matters, visit our home page at