Preparing Your Business For Sale
Our involvement in a client’s business transaction commences when our client retains us to assist. Often times we are contacted well into the process. We are happy to join the process at any time, but we find the process works best for our client the sooner they involve us in the transaction. Key parts of the transaction are often “finalized” in the initial discussions between the parties. We can create a more easily navigated process if we are involved in these initial discussions as there are many salient aspects of the transaction that should be addressed from the outset which may affect the price the parties will accept, the dates by which the transaction can complete or the ability of a party to perform the obligations required to complete the purchase or sale of the business.
We like to discuss what will happen during the business’ transition. When acting for the buyer, it’s important to determine the seller’s intentions. Will they be around to assist in teaching the buyer the day-to-day details needed to successfully operate the business, and if so, for how long? What are their future intentions – will they agree to a covenant restricting their ability to complete with the existing business by doing something the buyer could restrict, such as creating a competitive business or joining a competitor? If financing the purchase is a challenge, will the seller agree to finance part of the purchase price? When acting for the seller, the issues may be the same, but the goals may be different. Key considerations may be employee-related but likely a key consideration is to complete the transaction in the most tax-effective manner possible, with as little ongoing commitment as possible.
Each transaction will have unique aspects which is why we always recommend that our clients contact us from the outset so that we can most effectively protect them and their interests throughout the transaction.
If you are in the midst of considering the purchase or sale of a business in the Kelowna region give us a call now to discuss your options.