Buying and Selling a Business

A twenty-first-century update to the modern business classic . . .

For more than fifteen years, this handy guide has provided entrepreneurs and small business owners with a simple, step-by-step plan for buying or selling a business-without their own special team of lawyers and accountants. Written by leading business attorney Robert Klueger, this up-to-date guide now includes everything you need to know about recent tax law changes, as well as an entirely new chapter on limited liability companies. It answers all your critical questions, covering everything from the valuation of a business through the negotiation stages to closing the deal.

Packed with the kind of real-world guidance you can only get from a professional, Buying & Selling a Business, Second Edition shows you how to:
* Choose a business that's right for you
* Evaluate the business, determine why the seller is selling, analyze the seller's operations, and analyze balance sheets, income statements, and cash flow
* Negotiate effectively-including negotiating for price, timing, stock and asset agreements, noncompetitive agreements, and more
* Buy a franchise-key considerations that make a franchise different
* Ensure a hassle-free closing with no surprises

Preface v

Chapter 1 How to Choose the Business That’s Right for You 1

Chapter 2 Evaluating the Target (I): Why Is the Seller Selling? 11

Chapter 3 Evaluating the Target (II): Analyzing the Seller’s Operations 17

Chapter 4 Evaluating the Target (III): Analyzing the Financial Statements 35

Chapter 5 Negotiating the Sale (I): How Much Will I Pay and When? 65

Chapter 6 Negotiating the Sale (II): Stock Purchases and Asset Purchases 95

Chapter 7 Negotiating the Sale (III): The Look-See, Consulting Agreements, and Noncompetition Agreements 115

Chapter 8 How to Buy a Franchise 121

Chapter 9 Choosing the Form in Which to Conduct Business 137

Chapter 10 Limited Liability Companies: The New Kid on the Block 165

Chapter 11 Preparing to Buy: Finding the Money (or “How to Deal with Bankers”) 171

Chapter 12 Step by Step to Closing 179

Chapter 13 Some Thoughts on Selling a Business 193

Appendix 1 Sample Letter of Intent 203

Appendix 2 Annotated Purchase Agreement (with Exhibits) 207

Appendix 3 Sample Business Plan 227

Index 245

ROBERT F. KLUEGER is a partner in the law firm of Boldra, Klueger & Stein LLP of Woodland Hills, California, which specializes in taxation, estate planning, and asset protection for small and midsized companies. Mr. Klueger is also the author of A Guide to Asset Protection, available from Wiley. For more information, visit www.LAtaxlawyers.com. A twenty-first-century update to the modern business classic . . .

For more than fifteen years, this handy guide has provided entrepreneurs and small business owners with a simple, step-by-step plan for buying or selling a business–without their own special team of lawyers and accountants. Written by leading business attorney Robert Klueger, this up-to-date guide now includes everything you need to know about recent tax law changes, as well as an entirely new chapter on limited liability companies. It answers all your critical questions, covering everything from the valuation of a business through the negotiation stages to closing the deal.

Packed with the kind of real-world guidance you can only get from a professional, Buying & Selling a Business, Second Edition shows you how to:

• Choose a business that’s right for you
• Evaluate the business, determine why the seller is selling, analyze the seller’s operations, and analyze balance sheets, income statements, and cash flow
• Negotiate effectively–including negotiating for price, timing, stock and asset agreements, noncompetitive agreements, and more
• Buy a franchise–key considerations that make a franchise different
• Ensure a hassle-free closing with no surprises