1. 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 50266 SIKJDCPA@ KREAMERLAW.COM

2. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com  Identifying an opportunity  How to avoid pitfalls  What the process looks like  Pricing the transaction  Structuring the transaction DONE DEAL! OVERVIEW

3. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com  Changes in industry  Family changes  Retirement  Illness  Buyer with money willing to pay too much Identifying an Opportunity Reasons to Sell

4. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com Identifying an Opportunity Reasons to Buy  Strategic  Passion  Experience  Seller underpricing

5. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com  Unrealistic expectations  Due diligence on buyer  Over reliance on history (balance sheet)  Understanding buyer motivation  Premature announcement Seller: How to Avoid Pitfalls

6. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com  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

7.  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

8. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com What the Process Looks Like Timing 0 - 30 Day s Confidentiality agreement 30 - 45 Days Letter of intent 60 Days Contract 90 -120 Days Completion of due diligence Preparation of closing documents Rule of thumb

9. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com  Internal –Contracts –Employees –Assets What the Process Looks Like Due Diligence  External –Customers/vendors –Liabilities search –Approvals

10. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com  Lawyer: Negotiation/documentation  CPA: Due diligence  Banker  Consultants –Employee Benefits –Insurance What the Process Looks Like Team

11. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com  Pricing-Factors –Type of Business  Asset centered business  Service centered business –History  Profitability  Reputation –Barriers to entry Pricing the Transaction

12. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com Structuring the Transaction Payment at closing Seller “carry back” Consulting Agreement Non-compete Agreement Leasing“Earn-out”

13. Contact Kreamer Law Firm By Phone: (515) 727-0900 By Email: info@kreamerlaw.com DONE Deal! Questions?