Some of the most important decisions in buying or selling a business are made in the early stages that affect the entire merger and acquisition process. This initial buying or selling process includes the amount and form of the purchase price, the net financial benefit to the seller and buyer, and the timing of the closing. Both buying and selling parties would benefit from hiring a professional advisor such as an attorney, a tax accountant, and a banker/broker.
One of the main things that an owner wants to know if they are deciding to buy or sell a business is how much it is truly worth. Determining the value of a business involves several different factors. One thing to consider is whether or not fair market value is an accurate determination of the value of the business. This would be the amount for which the property would be sold in a voluntary transaction between a buyer and seller. This will include adjusting the financial statements or income tax returns to truly reflect the financial position of the business. This will help to determine what the true market value of that business is. Determining the value of the business also includes obtaining all the necessary legal documents for that business as well as any history, operations, profitability, policies, industry or assessments information that pertain to the business.
Pre-letter of intent period
Letter of intent