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Salt Lake City, UT 84106

Buying a New Business

For most of us, buying a new business is the single largest and most important transaction of our lifetime.

Buying a business is a huge investment of time and money.  Preparation is key to getting the most for your investment with the least amount of risk. There are unforeseen challenges, both personal and in a business.  Prepare and protect your investment and protect the future growth of your business.

Preparing for the Transaction of a Lifetime

<b><i>The key components to a successful transition of ownership are enough time to plan and assembling the right team.<br/> </i></b>

The key components to a successful transition of ownership are enough time to plan and assembling the right team.

You want people watching your back who are not new at this, you want decades of experience behind you—by people who are highly versed and are accustomed to all working together, knowing what you want, where you are, where you want to be, when you want to be there, so they can help you understand your options to guide you safely to your destination.

Assemble Your Advisory Team Carefully

Client Centered

No matter the size or complexity of the new company, you want to make sure this important transaction is correctly planned and executed by professionals that are well versed in your transaction.  This team includes TruNorth as your Financial Advisor, your lawyer, accountant, and commercial banker.  TruNorth Investment Management has the experience to help you make the right plans at the right time.

Protecting All Parties Involved

What is a Buy-Sell Agreement?

Who needs one?

Buy-sell agreements legally define the terms of the sale.  The agreement legally binds the buyer and seller of the company to buy the shares of the company at a pre-determined price and outlines payment terms.  Many times, insurance is used to protect all parties in the event of death, disability, or other legally qualifying events.

If it isn’t in writing, it never happened.  There are many events that happen in life personally and in a business.  Be sure to protect all aspects of ownership through the whole process.

Are there non-disclosure agreements? Non-compete agreements? Are all agreements legally sound and binding?

Items to Incorporate into the Agreement

  • Will you maintain the current corporate structure?
  • Business valuation—informal vs formal
  • Paying a fair price—accounting for tax savings is different from accounting for value generation on a balance sheet
  • Where to get financing
  • Making the numbers work—tying things up neatly with a bow
  • Making it legal—If it isn’t in writing it never happened. If you don’t have a plan in place, your state has one for you and it may expensive and time consuming and not look like anything you want to have happen
Financing Your Purchase

Financing Your Purchase

There are many options and combinations to finance buying the business:

  • Small Business Administration (SBA) Loan
  • Using Assets
    • Securities, Real Property, Cash, Investment Assets
  • Borrowing Assets
  • Down Payment and Note back to the seller

After the Deal is Done

Building the Bridge

  • Do you want the business to continue in the same manner? Do you want to make material changes?
  • Do you want to have the former owner involved? If so, for how long?
  • What about the key employees?
  • What about client retention?
  • How will you maintain key business relationships?

Your business is a big part of your life, proper acquisition planning can ensure success and continued growth.

As you are entering into this transaction, begin with the end in mind:

  • 78% of small business owners plan to fund their retirement from the sale of their business
  • Furthermore, those same business owners plan to fund 60% to 100% of their retirement needs from that sale
  • For many businesses, the two key determinants of business acquisition are leaving enough time to plan and having an adequate plan in place


Ready to Assemble Your Expert Team? Contact Us 

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