EXCLUSIVE AGENCY AGREEMENT

Use an agency agreement to grant exclusive agent rights.

Some businesses lend themselves to close relationships between parties. Salesmen who are assigned a certain territory, literary or talent agents who represent an actor or author, as well as other close business affiliations all demand a very specific business relationships: the exclusive agent-principal relationship. Whenever you intend to permit someone to act on your behalf exclusively, or you are the person who plans on acting on another’s behalf, you need an Exclusive Agency Agreement. Here is what you need to do to make sure your agreement is suitable:

WHAT IS AN AGENT-PRINCIPAL RELATIONSHIP?
Whenever one person agrees to allow another person to act on their behalf, they have entered into an Agent-Principal relationship. The agent is the person who acts on behalf of the person who hires them, called the principal. Agents can agree to deals as if they were the principal, making legally binding agreements that will be binding against the principal.

WHAT IS AN EXCLUSIVE AGENT?
An exclusive agent is one with special, exclusive rights that no other agent can have. A principal can hire an Agent to represent their business interests in a certain territory, industry or region. They can also hire an agent to represent specific properties, or for specific times, or any number of other constraints. The key difference between an Agency Agreement and an Exclusive Agency Agreement is that the exclusive agent is the only agent entitled to act on behalf of the principal, in as much as is specified by the agreement.

DOES BEING AN EXCLUSIVE AGENT MEAN YOU ARE THE PRINCIPALS ONLY AGENT?
Maybe. Depending on the kind of agreement you enter into, a principal can have numerous agents, all of whom are granted Exclusive Agency Agreements. For example, a manufacturer may enter into an Exclusive Agency Agreement with numerous sales professionals, all of whom have exclusive rights. These agreements will typically limit the agent’s exclusive rights to a specific territory or product.

HOW DO I ENTER INTO AN EXCLUSIVE AGENT AGREEMENT?
Depending on whether you are to be the principal or the agent, you first need to determine what your needs and desires are. Some agreements will be very broad, while others will be much more specific. No matter what, it is up to you to ensure the terms of the agreement accurately reflect what you want.

WHAT NEEDS TO BE STATED IN THE EXCLUSIVE AGENCY AGREEMENT?
This varies by situation, but there are several things that must be included in any agency agreement. Each party must know what rights the agent has, what obligations the principal has to the agent, the manner of termination of the agreement and many more. If the agreement covers sales or commissioned sales, these factors need to be included as well.

Like any good contract, the Exclusive Agency Agreement needs to be specific, complete and easy to understand. Since the agreement will serve as the basis for a close business relationship, it is in the best interests of both parties to be sure they are comfortable with all the terms of the agreement before they enter into it. A strong, properly formed Exclusive Agency Agreement can be the foundation to a solid relationship, while a poorly formed one can lead to numerous problems down the road.

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Plain English Guide to Shareholders and Partnership Agreements

Establishing a business is a challenging process. When two or more parties come together with a shared vision, it is common to focus on setting up the business in a logistical sense first and then selling and marketing the product or service. In many cases, the business owners neglect a vital step in the process of securing the future success of their business – a shareholders or partnership agreement. This Plain English Guide answers some of the more commonly asked questions regarding shareholders agreements and outlines the benefits. If you are thinking of setting up a business, or you are currently involved in a business that does not have an agreement in place, speak to your solicitor today about how you can protect your future.

What is a Shareholders/Partners Agreement?

A shareholders agreement is a written agreement between the shareholders or partners of a business. It is best prepared at the start of a business, when all parties are enthusiastic and there have been no disputes or disagreements over the running of the business. The agreement covers the funding, structure, management and direction of the business, as well as outlining the responsibilities and obligations of owners. It is critical that the individual circumstances of a business and the parties involved are taken into consideration. The agreement is also designed to deal with the issues that, based on experience, have a distinct possibility of arising in the life of a business. It can also help to determine in advance how those issues will be dealt with should they arise – rather than having the parties react “after the event” and potentially allowing self interest to affect what each party sees as the appropriate response.

Why do you need a shareholders agreement?

A shareholders agreement can avoid or minimise disputes over the running of a business and its funding. In much the same way as a prenuptial agreement can minimise the cost of a marriage breakup, a shareholders agreement can also reduce the cost and uncertainty of a business break up. Every business is different and every shareholder or partner is different – a good shareholders agreement can help to minimise the potential for conflict, the unpredictability and cost of dealing with conflict and maximise opportunity for growth. Once a business relationship has broken down it becomes very difficult to objectively look at key issues. It is much easier to decide on the fundamental issues early and to minimise the problems that can occur later.

What is covered by a shareholders agreement?

A legally binding shareholders agreement will specify a number of requirements for the successful running of a business. It will outline a range of issues, such as: The structure of the senior executive team – who will be director, whether there will be a managing director, how often the directors will meet etc. Voting rights of shareholders and directors Majority/percentage votes required for major decisions to be implemented The type of decisions that require a vote between shareholders – eg. purchase of major assets, loans over a certain amount, buying and selling shares etc What happens on a “deadlock” (even votes for and against a decision) and how it should be resolved Banking, accounting and auditing arrangements Dividend policies for the distribution or retention of profits Capital contributions and what assets are provided by each participant Shareholder obligations to provide “loans” to the business The type of business that will be undertaken and the planned future direction of the business Parties salaries and reviews including fringe benefits What happens when a party wants to “exit” the agreement, or passes away What events will “trigger” the termination of the agreement How shares will be valued in the event of a buy-out or sale to another party Restrictive covenants if a shareholder leaves

What happens if a shareholder or partner leaves the business?

The shareholders agreement should take this scenario into account and incorporate provisions for the buy-out or sale of a party’s shares. It will also identify the individual circumstances in which a shareholder can terminate an agreement, or what will happen in the event that one of the shareholders passes away. In many businesses, for example, there is no provision for the death of one of the shareholders or partners and the remaining spouse takes on the interest in the company. This is often not the best outcome for a business and can be avoided with a welldeveloped shareholders agreement and adequate succession planning. It is important to remember that even though a shareholders agreement is in place, if constructed and reviewed properly, it does not restrict the business or partnership’s progress.

What if my business doesn’t have a shareholders agreement?

If you are currently operating a business or partnership without an agreement in place, we recommend that you discuss your situation with an experienced commercial solicitor. In most cases, an agreement can be drafted based on the existing structure and operational style of the business. It also helps to identify possible issues and problems before they arise, and before business relationships become strained in the event of a conflict. Think about the future of your business. Don’t leave it to chance – you never know what is around the corner.

A Shareholders Agreements includes a provision that each shareholder agrees that in the event of death, their executor will be bound to sell the shares back to the company.

If you hold shares in a company – it is in your best interests to insist upon a Shareholders Agreement – if you don’t you are putting your investment at risk.

“HOW MUCH IS YOUR BUSINESS WORTH?”

Valuing Your Business –

So, how much is your business truly worth? Do you know 9 out of 10 business owners have little idea what the true value of their business is? Yet nothing is more important that getting this right.  Valuing a business can be very complex. In fact, a business can have more than just one value. It depends entirely on the seller or buyer’s perspective.   For example, a business can have a different value to an owner-operator buyer than it does to an investor buyer, or to a competitor wishing to expand, or to a supplier or customer wanting to vertically integrate. Unfortunately, it can also have quite a different value aain to a liquidator!   The better professional business valuers take the key drivers into account when they value a business.   (You can value your own business quickly and easily with the Small Business Appraisal Tool found in The Business Appraisal and Marketing Kit)

-The Key Drivers of Business Value.

The better professional business valuers consider the following factors when valuing a business:

- Margin.

The greater the positive difference between all business costs and sales, the more valuable is a business.

- Growth.

A growing business has a higher value than a business that is static or in decline.

- Asset utilization.

A business that uses the least amount of assets and uses them efficiently is more valuable.

- Financial engineering.

A business that actively seeks to optimize its weighted average cost of capital (WACC – the mix of equity and debt funding the business carries) and minimize its working capital is more valuable.

- Relative business risk. A business that is comparatively less risky when assessed against the business risk factors are more valuable.

Business Risk Factors - The following is a comprehensive list of risk factors used for valuing larger businesses:

° The length of time the company has been in business

° The length of time under the current ownership

° The number of employees

° The quality/appropriateness of the business location

° Condition and quality of plant and equipment

° The tenure and security of occupancy

° What working capital is needed to fund growth

° Threat of debtor defaults

° Business sales growth (past and future)

° Future industry growthpotential

° Desirability of the business (is there a demand for this type of business)

° Are there management control systems in place

° The documentation of systems;  jobs, procedures, policies

° Quality of the customer base and customer retention

° Level of competitor rivalry

° Advertising requirements

° Geographical scope

° Supplier power

° Buying power

° Threat of new entrants into the market

° Threat of substitutes on the market

° Degree of market focus

° Threat of litigation

° Customer loyalty

° Government regulation

° Owners’ working hours

° Owner dependency

Note – This is just a small part of the information that Business Appraisal and Marketing Kit will teach you about valuations.

However, for smaller businesses fewer risk factors are taken into account to arrive at an estimated business appraisal. The Small Business Appraisal Software supplied with the Business Appraisal and Marketing Kit uses the following 10 risk factors to calculate a business appraisal:

°The time the business has been in existence

° The quality and consistency of earnings

° Industry growth/expected growth

° Business sales growth over the last 3 years and expected in future growth

° The degree and intensity of competition

° Suitability of the business location

° Supplier concentration (relying on just a small number of suppliers is very risky)

° Buyer concentration (relying on just a small number of buyers is very risky)

° The difficulty of entry for new competitors

° Employee quality and stability
Why Do You Need a Business Valuation?

A business valuation will determine the value of your business and who your potential buyers may be and why they are interested in acquiring your business. The following are some things a business valuation is used for:   – Buying or selling at fair investment or market value   – Divorce   – Security for a loan at fair market value   – Selling or gifting to a minority party interest in the business (e.g. an employee you want to reward)

What Types of Valuations are Available?

A good valuation can cost you a lot of money.  An average business valuation can be anything around $3,500. But there is a cost-effective alternative you can successfully, at long last, do yourself. The Small Business Appraisal Tool that comes with the Business Appraisal and Marketing Kit does it all for you using simple, easy to follow steps.  There are many valuation techniques and The Kit has simple easy to follow explanations for the:

- Discounted Free Cash Flow Method

- Free Cash Flow Method

- Future Maintainable Earnings Method

- Net Asset Backing Method

- Market Valuation Methods

- Comparable Sales Method

- Industry Averages or Rules of Thumb

- P/E Ratios

- Owners Discretionary Cash Flow Valuation Method

- Business Affordability Method
Do It Yourself Valuations - Using the Small Business Appraisal Software program that is included in The Business Appraisal and Marketing Kit you get an accurate, full business appraisal based on the Owners Discretionary Cash Flow Valuation Method. The appraisal program makes it simple for a small business owner to value their business without the expense of other

methods. You take control.

The following is what an accountant says about the incredibly easy to use appraisal software tool included with the purchase of the Business Appraisal and Marketing Kit.

“Valuing a business can be a very subjective process. The business owner invariably thinks their business is worth a small fortune and, of course, the prospective purchaser wants to pay nothing for it. The book and software guide you through the process and helps to determine the appropriate valuation method and earning multiple applicable to your business.   I found the book and software extremely valuable as not only a guide for the small business owner, but a tool that accountants can use to advise their clients. Accountants in public practice are not taught how to value a business. It is something they either pick up from a more senior member of their firm or they attend a workshop specific to the subject.   I highly recommend this as a tool that all small business and public practice accountants should own and refer regularly to.”

Appraising your business is made so very simple using the unique Small Business Appraisal Software.  You can purchase your very own along with the full version of ‘How to Sell your Own Business’ at Business Appraisal and Marketing Kit.

Once your business is appraised and valued then you will need a business for sale legals and contracts kit. You can get a Complete Sale Of Business Legals Contracts Kit here. It will save you thousands of dollars.

YOU CAN SELL YOUR OWN BUSINESS!

There are many reasons for selling a business – Retirement, health, family lifestyle, or you may have built a successful business and the time is right to sell and move on. Whatever the reason, it’s going to be one of the most important business decisions you’re likely to make. The process of selling a business can be involved and complex if you don’t know the correct steps. However, armed with the right information you can successfully sell your own business. And, doing it yourself is more popular than ever with sellers reaping the rewards.

Business owners who sell their own business find it is an exciting and worthwhile task. No one has the knowledge of your business that you do – its unique benefits and day-to-day operations – so who better to sell it? What’s more, business owners place a lot of the importance on reducing and controlling information leakage, maintaining confidentiality and, of course, you avoid the high commission fees paid to a business broker.
What you need to know to sell your business -

The decision is made and you are keen to put your business on the market. What is the next step? What do you need to know about selling a business successfully? Here are some general tips to help you gain a better understanding of the process of selling your own business:

Making the decision to sell -

There is no reason why you cannot sell your own business. It is a straightforward process. While an accurate business appraisal (to establish the correct selling price) is one of the most important aspects of selling your business, some of the other things to consider but not limited to include:

- Preparing your business for sale

- Get your documents in order

- Advertising/marketing plan

- Prepare for buyer inquiry

- Understand potential buyers

- Due diligence
Preparing your business for Sale -

Selling a business takes planning and preparation to maximize your business’s top sales potential. Give yourself plenty of time to put everything in order – your accounts, systems and your people.

The Business Appraisal and Marketing Kit is a wealth of information and has simple, easy to follow steps to take you through each and every stage of the sale process.
Get your Documents in order -

Documentation covers a myriad of things such as financial accounts. It is important to have the following documents at hand and ready for the buyer presale:

- Confidentiality agreement

- Information memorandum

- Summarized information memorandum

- Buyer Enquiry Form

- Letter of intent

Confidentiality Agreements -

It is important to get a Confidentiality Agreement signed before giving out any confidential

information to a potential buyer. This document binds them to the terms of the agreement. Genuine buyers are fully prepared to go along with and sign the correct confidentiality agreement.

Straight talk:

Make sure you have a Confidentiality Agreement and it is signed before you give any information. We cannot stress this enough.

A copy of a Confidentiality Agreement can be found in

The Business Appraisal and Marketing Kit
Information Memorandum –

The point of the Information Memorandum is to give a potential buyer, details of your business and it becomes a great marketing tool.

The Information Memorandum should make the business sound appealing, and present all the significant information in a straightforward manner so a buyer can determine if they are interested in pursuing a purchase. If they are interested, they will however need further information.

The following are some of the headings from the template for writing your own Information Memorandum:

- Introduction and Summary

- Description of the Business

- Asking Price and Selling Terms

- The Industry

- Your Competition

- Your Products/Services/Customers

- Personnel

- Major Assets

- Business Plans

- Financial Statements

- Appendices
Summarized Information Memorandum -

Once you have completed the Information Memorandum, you should also do a summarized version.

You determine the level of information that you will send. Be certain you have the Confidentiality Agreement signed and returned before sending out such detailed information.

For the full version of the Information Memorandum template and templates for all the forms you need to sell your own business see The Business Appraisal and Marketing Kit. Its simple steps make it easy for any small business owner to follow.

How to Write a Sale of Business Information Memorandum

The Information Memorandum is a marketing document used by the vendor to promote their business to a potential buyer. The aim of the document is to make the business sound attractive to buyers, and also to convey all significant information to parties who are already interested in making a purchase.

A good Information Memorandum will predict all the questions a potential buyer might have about your business. It should contain a description of the business’s history, its past achievements and future prospects, as well as the particulars of its operation.

For more information on Information Memorandum or any aspect of a Sale of Business please go HERE.  It has indispensable insights, tips and tricks to help you get the most for your business AND save yourself thousands in the process.

Drastically Cut your business costs by using professionally drafted legal contract and business document templates

AND it’s the only legal package approved by the Law Society.

Our new 101 Business Essentials V5.0 can save you thousands of dollars because it helps you to create reliable legal documents from your home or office computer.

How is this possible?

Since 1990, R P Emery & Associates have supplied the professional sector with legal documents and agreements in hardcopy.

NEW 101 Business Essentials

RP Emery & Associates has just released an up-to-date set of “101 Essential Key Legal Documents and Business Agreements” ready for quick editing in Microsoft Word or your favourite word processor.

Simply open the document you wish to use, insert all relevant details in the appropriate spaces, and go to print.

It’s that Easy!

What’s more, you can use the same document again and again with no further cost.

Think about it, you can have at your disposal, a comprehensive set of legal and binding contracts, covering a wide variety of crucial business and personal areas.

With the click of the mouse, you have access to bill of sale, power of attorney, partnership and joint venture agreements, promissory notes, commercial leases, contractor agreements and more.

It’s the only legal package approved by the Law Society.

Meet your Legal Needs

This means that you can competently meet your legal and contractual requirements without the cost of hiring a solicitor.

Whilst its true that complicated legal matters do require professional advice, many straightforward day to day issues can easily be addressed, simply by having access the correct document.

In fact, it’s no secret that law firms use templates just like these every single day.

Let’s face it, having a qualified solicitor draft a common legal contract these days can easily cost you $300 or more per hour. This legal template kit gives you 101 of the most frequently used contracts in business today…

So even if you use just a single contract it will save your valuable time and money.

Who uses these contracts?

Basically anybody from individuals to large public corporations, and many legal firms.

We have customers who cannot afford to use high cost professional legal services and a great many who can – but simply elect not to.

Many Law Firms and Legal Practitioners, AMP, Amway, BHP, BP Australia, Honda, National Treasury ACT, NSW Department of Transport, City of Melbourne, Department of Australian Defence, Banks, Churches, and Universities are just a few of the hundreds of Organisations, Government departments and Corporations using R. P. Emery & Associates contracts.

Qualified and experienced solicitors drafted all contracts to comply with Commonwealth, state(s), and independent territory by-laws and it’s the only legal package approved by the Law Society.

These 101 Business Essentials WILL drastically reduce your legal costs.

If you want to save even more and free up more time to focus on other more interesting aspects to your business, then try our ‘Legal Suite‘.

Commercial Retail Shop Tenancy leases and laws

Retail tenancy laws through out Australia have been developed to protect the interests of small business consumers and to assist in levelling the playing field for the parties involved. They seek to provide this protection by making sure that prospective tenants have sufficient information to make a sound business decision about entering into or renewing a Retail Shop Lease rental Agreement.

The type of lease you enter into will depend on a number of factors, including the premises itself and what you wish to use it for. Each state has its own Legislation or Act that defines the type of premises and whether the act will apply. Whether you are a landlord or a tenant its imperative you understand your rights and obligations under the relevant Act and honour your obligations under the lease agreement to ensure you stay out of the legal minefield.

The retail tenancy law is very clear in most Australian states:

A landlord in a retail lease must not, in connection with the lease, engage in conduct that that is misleading or deceptive to a tenant or guarantor. A party who suffers damage by reason of misleading or deceptive conduct of another party may make a claim for compensation.

Because the laws are different in each state we’ve outlined the requirements of each state on the following pages

• New South Wales
• Victoria
• Queensland
• Western Australia

COMMERCIAL PROPERTY LEASE

Whether you are going into business or want to rent a property to tenants, you are going to have to enter a lease agreement. Commercial property lease agreements are necessary whenever you intend to rent a property for commercial use, or when you want to fill your commercial space with paying tenants. No matter which side of the equation you are on, there are qualities to commercial property rental agreements you will need to know before you enter one. Even if you are just looking for a simple lease of some office space or buying a property to lease it as commercial property, be ready before you take that step. Here is what you need to know:

Business may be complicated. If you want to rent office space or store-front space, you need to be sure your lease gives you enough latitude so you can run your business your way. But also enough security to make sure you can’t be kicked out at will. If you are a landowner, you want to make sure you protect your property and not compromise its value by renting to a party that will cause you problems. Either way, knowing how to make a complete Commercial Property Lease Agreement is essential.

Commercial Property Lease Agreement

This Commercial Property Lease Agreement is suitable for the tenancy of most types of Australian Commercial premises such as offices, warehouses or industrial property. If you have a retail shop to lease please see the Retail Shop Leasing pages.

A solid real estate lease can protect your investment by defining your relationship with your tenants and shielding you from potential liability. In fact, a well-crafted lease should be the foundation for the ongoing relationship between you and your tenant.

Our professional Commercial Tenancy Contract with easy to follow instructions, give you the confidence that your interests are protected.

Commercial Property Lease Agreement Available for Immediate Download Only $79.95 More Information Click Here

or you can direct to our shop and BUY NOW!

Commercial Property Sublease Agreement Available for Immediate Download Only $99.95 More Information Click Here

or you can direct to our shop and BUY NOW!

BEFORE THE DEAL

Communication, Negotiation and Bargaining Style

Decide on a negotiating style. You may be a competitor, looking only for the best deal; others are compromisers, seeking middle ground; or are you the collaborator, valuing good communication and a fair solution for both parties? Try to asses which style works best for your personality.

Assessing the buyer

Your best asset in any negotiation is information. Qualify the buyer by asking for a personal financial statement. There’s no point wasting time with a buyer who can’t afford your business.

AT THE TABLE

Momentum

Delays destroy deals. Once a prospective buyer emerges, do everything in your power to keep the deal moving. Set up meetings, provide information, and keep trying to move the buyer forward to an offer. Respond promptly to all buyer requests and proposals. If you drag out the process, the buyer will lose interest and move on.

Goals

Set goals at the start so you and the buyer are aware of what you want to get out the negotiation process. A clear plan on both sides should prevent either party from taking the lead. A good negotiator will always win on the more important issues and let the other party win on the minor ones. You can do this if you keep your goals in mind.

Understanding basic psychology may help during this process. A good tactic for the seller would be to emphasize the growth of the business, and how well the purchaser would fair in the future.

Negotiating structure

The order of negotiation should be: needs, terms, price. Draft a list of your needs in the sale of the business. Do you seek employment after the transfer for yourself or others? A discussion of needs should take place before any talk of terms or price.

Terms drive the deal. Discuss terms before price—they are more important, and will have a tremendous impact on the final price. In the majority of deals, terms decide the deal.

Price and flexibility

Have the buyer make the first offer. You have probably already listed an asking price on your ad, so when the buyer asks “What do you really want for the business?” try not to deviate. You want the buyer himself to make up the ground between his valuation and your own.

Avoid emotions as much as possible. Banging the table and refusing to budge on matters of price are good ways to scare the buyer away. There will always be a set of terms to offset a lower price. Likewise, a higher price may be able to offset less favourable terms. Everything is flexible. Both buyer and seller should know this.

Don’t lose focus!

Nitpicking and getting stuck on tiny details are sure ways to irritate a buyer, increase legal costs and kill the momentum of a deal. Don’t pick dirt with the chickens.

KEY POINTS

Selling Price

While it may sound like a simple number to reach, the selling price may actually be divided into the following pricing sections:

• Equipment, supplies, and inventory

• Price for buildings and company-owned land

• Purchase of owners shares of stock, and that of other shareholders

• Non-compete agreement compensation

Decide on Contingencies

Conditions which have to occur before the completion of a sale are called contingencies. They might include:

• A good review of the businesses financial records

• Earnest money or escrow receipt

• Buyer qualification by their lender

• Lease transfer for building deemed acceptable

• Buyer bank financing deemed acceptable

Consider Covenants (Promises)

Promises made by one party to another are called covenants. They might include:

• Non-competition covenant or non compete agreement.

• A ‘business as usual’ promise from the new owner. The new owner promises not to distort the business by making unusual agreements, and to provide the customers with the same level of service as that under the previous owner.

Representations and Warranties

Warranties are reassurances made from one party to the other in a business sale. Including:

• Accuracy and completeness of financial records

• Accuracy of goods and products inventory

• Seller possesses full authority in the selling of assets, and is not in default on any contracts

• Leases are in order, taxes are paid, liabilities are current, and there are no liens (claims) against any assets that have not been disclosed

• Validity of all permits, licenses and certifications

Transition Issues

Transition issues include:

• Inventory or customer work that is ‘in-progress’

• How to deal with ‘hidden’ liabilities showing up after the closing of the sale

• How customer contact is to be handled, and by whom

• Employment of current employees

• Vendor contracts and contact details

HOW MUCH TO REVEAL, AND WHEN

It’s necessary to disclose everything about your business before receiving or accepting an offer. Let the buyer know there will be time for a books-check (due-diligence) – and that if there are problems they can withdraw. You may hold back on information that would be damaging if disclosed too early (e.g. customer information or key processes) – if the buyer needs to see such information for a valid reason, (for instance, to assess the size of the customer base) you can always change the names on the list.

Negative information should always be cleared before any offer is made. Honesty is crucial in negotiation. Despite the fact that honesty will always be reciprocated, dishonesty strips you of credibility and may compromise the entire sale.

At some point a sale of business purchase agreement will be needed. The buyer’s attorney would usually draft this agreement, which saves the seller legal fees. However, a sale of business kit and contract agreement package is available through our website, which can save a lot of unnecessary legal fees. If you have to negotiate any extra hurdles then these changes can be made in the contract as they arise. This prevents having to pay a solicitor the very costly re-drafting fee.

Next comes the Letter Of Intent (LOI), stating terms and price – the two crucial negotiating points. Make sure you are happy with the terms and price before the LOI is issued. Don’t accept a LOI and assume you will be able to do further negotiating later on.

WHEN TO CALL IT QUITS

Never negotiate with a messenger. In giving all the information to a person who can’t make a final decision, you are relinquishing most of your negotiating strength. The buyer will have the information relayed to him and can pull apart the deal as a whole, rather than point by point, as would happen in a meeting. If you have to meet with a right-hand man early on, be sure to keep some information up your sleeve for later on.

Set a condition on which you will “walk away” from the deal (price and terms). Know when to move on to the next buyer. Don’t waste your time with someone who can’t meet your needs, terms and price.

For More Valuable Business For Sale Information Please Try Here

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