Selling a small business is one of the most significant events in a business owner's life. It is a financial transaction and a personal transition. Owners often expect the business sale process to be hard from a legal and operational perspective, but what surprises many owners is how hard it can be emotionally. Here are common psychological challenges owners face during a sale. Feeling a Loss of Identity Many owners define themselves through their business. They have spent ye

Owners of certain businesses might hear the phrase “personal goodwill” during the sale of their business, usually from a CPA or M&A lawyer. When used properly, selling personal goodwill can be a powerful planning tool for a seller. This post explains what personal goodwill is, which types of business owners may be able to separate personal goodwill from enterprise goodwill, how a portion of the purchase price can be allocated to personal goodwill, and the pros and cons of doi

Selling a business is one of the most significant financial events in an owner’s life. It's not only a legal and operational transaction, it's also a major personal wealth event that requires thoughtful planning before the sale and disciplined management of the proceeds afterward. Adding a skilled financial advisor to your deal team can help a business owner extract the wealth they have created for their next phase in life. The right advisor helps the owner prepare for the sa

Receiving a draft Letter of Intent ("LOI") from a prospective buyer of your business can feel like a major milestone, but an LOI is more than a simple expression of intent. It is the blueprint for the entire deal that follows. The terms in the LOI will guide the purchase price and payment, due diligence, the drafting of the purchase agreement, the transaction structure, the closing timeline, post-closing transition, and the obligations each party must satisfy along the way. S

Business owners often tell me that they are resigned to closing their doors when they retire because they don't think anyone would be interested in buying their business. Many small business owners assume their business isn’t “big enough,” “interesting enough,” or “profitable enough” to attract a buyer. It’s a common and an understandable reaction. After all, you’ve spent years keeping the doors open, attracting customers, solving problems, building brand recognition and good

You've invested a significant amount of your life building your business. You've reached a point where you want or need to sell it. You might be ready to retire, your health may not be able to support the time and stress required to run a business, or you may be ready to move on to another opportunity. How do you find someone to buy your business so you can extract the wealth you have created? Who Might Buy Your Business? Small businesses attract potential buyers in the follo

Explore legal issues of a business breakup caused by a deadlock among owners

I've heard some frustration from searchers, investors, and advisors about working with seller's lawyers. Most of that frustration seemed to come from sellers using lawyers who have little to no experience in small business purchases and sales.

A closing date in a contract is a goal to work toward, but you should anticipate that it will likely be extended to a later date because the buyer, seller, and their teams need time to complete all the tasks related to closing.

What you can expect of a business lawyer when buying or exiting a business. Business lawyers manage the many tasks that need to be accomplished before closing such as: drafting and reviewing legal documents, developing negotiation strategies and negotiating the terms and conditions of the legal documents, coach/advise clients through the process, and project managing the process to get you to closing your deal.

Sellers often ask if they can get their costs and expenses (e.g., accountant's fees, attorney's fees, etc.) paid or reimbursed if the sale of their business doesn't close. The answer depends on the timing of the termination, what the legal documents say, and what's customary.

Some provisions in a letter of intent should be binding, while others should not, and the letter of intent should clearly indicate which are which.

Seller financing is common in many small business sales, and many small business sales might not happen without it, but a seller should be diligent in its consideration of whether to agree to it. Here are some questions sellers can ask when making that decision

Technically, the law does not require you to use an LOI, but here are some things to consider when determining whether to do so.

Three things to look for in a lawyer when buying or exiting a business: An M&A lawyer needs to be a good project manager, able to filter and rank issues, and be adaptable.

You might think that the lower the purchase price of a business or real estate, the lower the legal fees. But here's the thing: most transactions require the same amount of legal work, regardless of the purchase price.

You might be asked to sign a confidentiality or non-disclosure agreement if you are exploring the purchase or sale of a business, a joint...

Deals have lots of moving parts, no matter the size of the business or the size of the deal. Lots of issues move simultaneously. Losing...

Are contracts a valuable asset of the business you are buying or selling? If so, you need to make sure those contacts can be transferred...

The purchase or sale of most businesses will involve transferring intellectual property ("IP") rights - i.e., patents, trademarks,...