Stories of failed business purchases by buyers who, in good faith, neglected to follow the previous steps recommended by Florida business brokers are common. These steps, when what is at stake is to consummate an honest transaction, should be the following:
- COMMITMENT. The Buyer agrees to entrust the business broker with the search for a business for sale that is suitable for its financial capacity and that meets its business expectations.
- MARKET ANALYSIS. The broker will present the Buyer with concrete business alternatives that meet their needs. The Buyer will choose at this level one or several businesses to be evaluated in depth.
- NON-DISCLOSURE AGREEMENT. The Buyer signs, for each business that will be analysed, an agreement committing to keep the confidentiality regarding the information that will be provided.
- VISIT TO THE BUSINESS FOR SALE. The broker will coordinate the Buyer's visit to the company and will facilitate an interview with the owner. During this visit, the Buyer will have the opportunity to learn general aspects of the operation of the business and may ask the owner any questions that he considers pertinent. If at this level the Buyer is motivated to buy, it is time to prepare the purchase offer.
- BUY OFFER. Based on the elements provided, the Buyer drafts, with the assistance of the broker, a Purchase Offer that expresses the conditions under which it would be willing to acquire the selected business. The purchase offer will be conditioned to the verification of the figures contained in the accounting books, the transferability of the lease contract and the legality of the official operating permits, among other contingencies. The offer document is not binding until these contingencies are removed by the express consent of the Buyer. It is the task of the broker to present the Offer to the Seller.
- ACCEPTANCE. The Seller will accept the offer in the original terms, may counter-offer or reject it. When the offer is accepted by the Seller, the Buyer will proceed to deposit in a trust account a sum equivalent to 10% of the price agreed with the Seller.
- INSPECTION. The offer generally stipulates a term long enough for the Buyer to review the financial statements, the operating licenses, the lease agreement and other essential aspects of the business. This review and analysis process is the most important step towards a successful sale. At this stage, the Seller must collaborate with the Buyer to clarify all his doubts regarding the business. If the Buyer decides to withdraw at this stage, he may withdraw the amount deposited in full.
- REMOVAL OF CONTINGENCIES. Once the Buyer's conditions are satisfied, the Offer Agreement becomes a binding Purchase-Sale Agreement.
- LEASE. In some cases, the Buyer must negotiate the transfer of the Lease Agreement with the Lessor. The broker usually assists the Buyer in the process of obtaining the assignment or signing a new contract.
- CLOSING AGENT. The Closing Agent is generally a specialized lawyer who is in charge of preparing, with the assistance of the broker, the necessary documents -promissory notes and other contracts to support the operation- for the closing day. Likewise, it verifies the absence of liens on the goods sold and safeguards the funds deposited by the Buyer.
- INVENTORY. If this is the case, the broker is in charge of coordinating with the Seller and the Buyer the physical taking of inventories on the eve of closing.
- CLOSING. The Buyer and the Seller meet to sign all the documents that prove the legal transfer of the business assets. Immediately after, the Buyer will be in full capacity to take possession of the acquired business.
In the case of foreign buyers, who are generally unaware of local business uses and customs, it is especially advisable to hire the services of a business broker. For them, the broker's services are free because the person who pays the broker is the seller of the business.
For the rest, the presence of a business broker will convey to the contracting parties the peace of mind that the transactions will be executed under the ethical, reliability and legal elements necessary for everyone to sleep peacefully.
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