If you are looking to buy or sell a business in Washington State, it is something that will require careful planning and enlisting the correct professionals to work with to get your business ready to sell and assist you in the purchase and sale process in Washington State. Richard Symmes discussed how to buy and sell a business on 1150 AM KKNW and you can listen to the show here:
Who Should I hire to Assist with a Purchase and Sale of a Business in Washington State?
While you could sell your business on your own, it is recommended that you work with professionals who have gone through the purchase and sale process before and who are there to guide you. One factor that could weigh in on who you want to work with is whether the business owner has a willing buyer already and just needs assistance with the paperwork or whether the business needs to be marketed and shown in the best light to potential buyers. Another factor is whether your business owns real estate or whether the business is leasing space. Finally, you will need to determine if all of the financials of the business are available and ready to be provided to potential buyers. You could either hire the professionals to work with a la cart or work with a business broker who may have all the professionals in you need in one place.
Real Estate agents that help consumers buy and sell real estate could offer to assist you in the sale of your business. With that said unless they are a commercial broker and have experience buying and selling businesses this may not be the best approach unless you are also hiring other professionals to assist in the other business-related areas including the financials of the business.
A business broker who assists businesses with buying and selling may have a team of people that can assist with accounting, legal contracts, selling real estate as part of the transaction and documents, valuing the business and marketing the business for sale.
Working with a business attorney to assist you in the drafting of legal documents to get your business ready to for sale such as the letter of intent between the buyer and seller, draft the sale agreement, assist in the transfer of real estate and advise on state licensing issues. If you are not working with a business broker who has their own attorney to offer, you will want to work with your own attorney.
An accountant will definitely be needed to assist in determining the profitability and the valuation for a business. The accountant could be part of the business brokers team, or you can hire your own accountant to assist with the evaluation of the business’ financials and the valuation of the business.
What are the Steps to Purchase and Sell a Business after you Have your Professionals in Place?
(1) Prepare business for sale including updating financial documents and list of business assets and debts in order to get the business potentially valued and easy to provide to a potential buyer. The buyer should be doing their due diligence as to whether to purchase a business or not prior to signing any agreements.
(2) Prepare a letter of intent. A letter of intent, typically drafted by a buyer of a business, outlines the general terms of the agreement to buy a business. This lets the parties know what to expect as part of the deal and make sure everybody is on the same page. This letter should include the agreed upon price, what is going to be included in the transaction in terms of assets and what debts will be assumed or paid off at the closing of the transaction. This letter is non-binding and general in nature as the terms will be finalized as part of the actual contract.
(3) Prepare definitive agreements and contracts in anticipation of closing on the transaction. As part of this process leases should be negotiated with landlords or possibly closing docs for real estate being prepared for transfer as part of the real estate transaction.
(4) Close on the transaction. This includes paying any debts including Washington state taxes, signing deeds or lease assumptions, contracts, transferring trademarks and licenses etc. These days most closing can be done virtually and may require a notary to witness the signatures. Similar to a real estate closing, business closing can utilize escrow services to handle such transactions to make sure everything is recorded property and paid up as required.
Whether you decide to utilize a business broker, real estate agent, attorney, accountant or all of the above will depend on your transaction and your specific needs. If you need an attorney or real estate professional to assist with your business transaction, give Symmes Law Group a call at 206-682-7975 or contact us to get the counsel you need.