Sheehan & Associates, P.L.C.

What to consider when buying a business in Michigan

Some individuals find the idea of purchasing an existing business to be easier than starting their own. With an existing organization, many policies, processes and client lists have already been developed, which may reduce the initial costs associated with owning a business. However, it is important for people to do due diligence to ensure that they understand the current state and value of a business before making a purchasing decision.

Determining the value of a business, which is an essential part of calculating a fair purchase price, is an essential part of the buying process. Along with helping someone determine how much they can expect to pay for an organization, it may assist them in discovering potential problems related to cash flow, outstanding debts and difficulties collecting debts. There are several ways that someone can determine the value of a business, including capitalized earning approach as well as the tangible assets and excess earning methods.

Individuals should also research the organization in question. This will involve looking into financial statements and tax returns as well as seeing what type of agreements and contacts a business has entered into. Other important documents include client lists, sales and employee records, and information about whether a property is leased or owned.

Business planning is still essential when purchasing a business. Individuals may still need to outline processes for running things in addition to being aware of legal regulations. A business and commercial law attorney may be able to assist someone with understanding the requirements of state and federal laws as they relate to a business purchase.

Source: SBA.gov, "Buying Existing Businesses", September 19, 2014

No Comments

Leave a comment
Comment Information
Email Us For A Response

Tell Us About Your Legal Concern. We Will Respond Promptly.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Sheehan & Associates, P.L.C.
1460 Walton Blvd , Suite 102
Rochester Hills, MI 48309

Toll Free: 877-600-7891
Phone: 248-218-1473
Fax: 248-650-5368
Map & Directions

map