There are certain essentials that a buyer and a seller must consider when contemplating the sale or purchase of a business to ensure that the transaction is successful. Here I’ll cover some of the basics to help you avoid problems both during the transaction and after.
Possibly the most important thing you must consider is whether you know enough about the business. As a seller, ask yourself: are you intimately familiar with the business’ financial position and history so that you can set an appropriate price and honestly respond to the buyer’s concerns? Conversely, if you’re the buyer, you need even greater knowledge. Do you know the industry you’re entering into? Do you know enough about this particular business and its employees and customers; and, most importantly, what do you know about the business’ financials?