Buy A Business

Our attorneys bill at an hourly rate of $425 – $550, depending on the complexity of the work, and our paralegal staff bills at an hourly rate of $175. Before commencing any work, we first meet with you to determine whether we are a good fit, and, if so, we provide you with an estimate as to the project. Generally speaking, attorney fees for a business sale can range from approximately 1% to 4% of deal value. Businesses in heavily regulated industries tend to require more work due to the need to review additional contracts and to ensure that the sale complies with all regulations governing the business.

It’s unlikely that there will be additional costs, although you may have some minimal filing fees with state agencies, depending on the nature of the business being acquired and how it is regulated. If an escrow agent or title company is used as part of the transaction, then fees might need to be paid to them as well.

The typical documents usually include a letter of intent, an asset purchase agreement (if an asset sale) or stock purchase agreement (if a stock sale), bills of sale, intellectual property assignment agreements, and any necessary filings that must be made with state authorities, which may include tax filings. Other documents that are sometimes included, depending on the type of transaction, include a goodwill purchase agreement, lease assignment, consulting agreement, employment agreement, promissory note and security or pledge agreements, and any necessary internal company consent resolutions.

The amount of time needed depends on how quickly the buyer and seller exchange the information they each need from the other, and how willing they are to cooperate with each other. We’ve helped clients close acquisitions in as little as a few weeks, while other acquisitions have taken up to a year.

You can hire a business valuation expert to help you determine what the business you’re targeting might be worth. That said, until an offer is made, and a letter of intent is signed, you likely won’t have enough information to get an entirely accurate valuation, because you won’t have the financial records of the target company. Those records, along with additional information, are typically turned over by the seller during the due diligence phase of the acquisition. In smaller transactions, the seller and buyer often will agree upon a price without seeking the advice of a valuation expert.

The U.S. Small Business Administration (SBA) offers loan financing options for buying a business. That’s a popular option for financing the purchase of a business. Other options include getting money from friends and family, or private money investors who may be interested in taking an ownership interest in the business to be acquired. Sometimes sellers may be willing to finance the sale of a business, by allowing the buyer to pay the seller in installments over time, and using the revenues from the business to make those payments.

Not necessarily. If you’re more comfortable being represented by a business broker, or you find a broker that you think brings significant value, then you might consider it, but it’s not required. Most business brokers in the Portland, Oregon area charge a commission of 10% on the sale of a business.

We wrote an article entitled How to Buy A Business, which explains more of the details in each of the steps outlined above. Alternatively, if you’d like to speak with us to get your specific questions answered, just Contact Us and we'll help in any way we can.