http://blog.torontobusinessbroker.com/technical-assistance-with-buying-a-new-business Business for sale information. Tips related to selling or buying a business. Tue, 6 Jan 2009 13:26:05 +0000 http://wordpress.org/?v=2.6.1 http://blog.torontobusinessbroker.com/technical-assistance-with-buying-a-new-business#comment-640 NWest Sun, 20 Jul 2008 06:01:16 +0000 http://blog.torontobusinessbroker.com/?p=22#comment-640 Just a quick comment on verifying the accounts receivable. Often, when buying a business and even after the price and structure has been negotiated, it is customary to holdback a certain amount of the cash payment to verify the AR. If the vendor is selling you $1 million in AR, you want to know that the AR is actually going to be collected. So, holdback $500k from the purchase price for a period of 4 months, until all the AR has been collected. The amount of any AR that doesn't materialize is deducted from the holdback. Just a quick comment on verifying the accounts receivable. Often, when buying a business and even after the price and structure has been negotiated, it is customary to holdback a certain amount of the cash payment to verify the AR. If the vendor is selling you $1 million in AR, you want to know that the AR is actually going to be collected. So, holdback $500k from the purchase price for a period of 4 months, until all the AR has been collected. The amount of any AR that doesn’t materialize is deducted from the holdback.

]]> http://blog.torontobusinessbroker.com/technical-assistance-with-buying-a-new-business#comment-639 Kerry Thu, 17 Jul 2008 18:16:45 +0000 http://blog.torontobusinessbroker.com/?p=22#comment-639 I agree that when you're buying a business, you need to do your due diligence with respect to any equipment that's being transferred. Your lawyer will make sure to get an affidavit from the vendor which has a list attached detailing all equipment being transferred (including serial numbers). Also, you need to agree on how much of the purchase price is being allocated to the equipment- this is important to know because it will establish how much of the cost of the equipment can be depreciated over future years. I agree that when you’re buying a business, you need to do your due diligence with respect to any equipment that’s being transferred. Your lawyer will make sure to get an affidavit from the vendor which has a list attached detailing all equipment being transferred (including serial numbers). Also, you need to agree on how much of the purchase price is being allocated to the equipment- this is important to know because it will establish how much of the cost of the equipment can be depreciated over future years.

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