DONE DEAL! Buying or Selling a Business SAMUEL I KREAMER J.D.,C.P.A. ATTORNEY AT LAW 7155 LAKE DRIVE, SUITE 200 WEST DES MOINES, IA KREAMERLAW.COM

Contact Kreamer Law Firm By Phone: (515) By  Identifying an opportunity  How to avoid pitfalls  What the process looks like  Pricing the transaction  Structuring the transaction DONE DEAL! OVERVIEW

Contact Kreamer Law Firm By Phone: (515) By  Changes in industry  Family changes  Retirement  Illness  Buyer with money willing to pay too much Identifying an Opportunity Reasons to Sell

Contact Kreamer Law Firm By Phone: (515) By Identifying an Opportunity Reasons to Buy  Strategic  Passion  Experience  Seller underpricing

Contact Kreamer Law Firm By Phone: (515) By  Unrealistic expectations  Due diligence on buyer  Over reliance on history (balance sheet)  Understanding buyer motivation  Premature announcement Seller: How to Avoid Pitfalls

Contact Kreamer Law Firm By Phone: (515) By  Experience  Difference between employee and owner  Difference between a business and a job  Over reliance on history (P&L)  Over reliance on internet Buyer: How to Avoid Pitfalls

 Contract-Engagement –Fully sets out the terms of the transaction –Representations and Warranties  Establish the legal liabilities of the Parties  Limitations –Knowledge –Materiality  Length of time –No “standard” –10 year limitation on written contract –Not all need have same limit  Most problems become apparent in first 24 months  Consider liquidated damages provision  Closing-Marriage What the Process Looks Like The Marriage Analogy Meeting Identify an opportunity Dating Confidentiality Agreement Exclusive dating Letter of intent Engagement Contract of sale Relationship Due diligence Marriage Closing

Contact Kreamer Law Firm By Phone: (515) By What the Process Looks Like Timing Day s Confidentiality agreement Days Letter of intent 60 Days Contract Days Completion of due diligence Preparation of closing documents Rule of thumb

Contact Kreamer Law Firm By Phone: (515) By  Internal –Contracts –Employees –Assets What the Process Looks Like Due Diligence  External –Customers/vendors –Liabilities search –Approvals

Contact Kreamer Law Firm By Phone: (515) By  Lawyer: Negotiation/documentation  CPA: Due diligence  Banker  Consultants –Employee Benefits –Insurance What the Process Looks Like Team

Contact Kreamer Law Firm By Phone: (515) By  Pricing-Factors –Type of Business  Asset centered business  Service centered business –History  Profitability  Reputation –Barriers to entry Pricing the Transaction

Contact Kreamer Law Firm By Phone: (515) By Structuring the Transaction Payment at closing Seller “carry back” Consulting Agreement Non-compete Agreement Leasing“Earn-out”

Contact Kreamer Law Firm By Phone: (515) By DONE Deal! Questions?