Financial Solutions, Business Banking

Thinking of Selling or Buying a Business? Your Guide for Success

By Anthony Botelho
Executive Vice President and Chief Commercial Lending Officer

Whether you're a business owner looking to sell or an entrepreneur seeking to acquire a new venture, it’s never too early or too late to start thinking about when and how to take that next move. Understanding the steps involved in addressing financial, legal, and operational issues is essential to meet your goals and achieve a successful transition.

Assembling Your Team

Whether buying or selling, the most important step is assembling your professional team of financial and legal experts – including bankers, attorneys, and accountants – to assist you with due diligence, valuation, negotiating terms, and handling legal and tax implications.

Selling Your Business

Whether due to retirement, health issues, a desire to pursue other interests, or a lack of profitability, it's important to consider the timing of the sale to ensure that the business is in a strong position to be sold. Here are some factors to consider:

  1. Assess your readiness. Take a step back and evaluate your motivations, personal goals, and financial expectations. Consider factors such as your industry's market conditions, competition, and the value of your business.
  2. Prepare your business for sale. Accurately valuing your business is crucial to attracting potential buyers. Enhance the value of your business by organizing financial records, updating your business plan, and addressing any operational inefficiencies. Conduct a thorough review of your assets, liabilities, contracts, and customer relationships to ensure they are in order.
  3. Identify potential buyers. Develop a marketing strategy to reach potential buyers. Maintain confidentiality during the initial stages to protect sensitive information.

Buying a Business

Buying a business can be a great way to expand your existing business or enter a new market. You’ll want to consider these factors:

  1. Define your acquisition criteria. Clearly outline your goals, industry preferences, budget, and desired business size. Determine whether you prefer to acquire or merge with an existing business or start from scratch.
  2. Conduct due diligence. Thoroughly investigate the target business's financials, operations, legal history, customer base, and competition. Scrutinize their assets, contracts, intellectual property rights, and potential liabilities.
  3. Finance the acquisition. Explore financing options available to you, such as bank loans, private investors, or seller financing. Prepare a comprehensive business plan and financial projections to present to potential lenders or investors.

Closing the Deal

When it comes to closing a deal, rely on your professional team to provide the financial and legal support to negotiate and structure a deal that safeguards your interests, including the transfer of assets, liabilities, and intellectual property rights.

Washington Trust: Your Commercial Banking Experts

With 222+ years of understanding the local market and needs of local businesses, Washington Trust provides confidential, expert support for businesses looking to buy, sell, or merge – all under one roof. Our experienced Commercial Banking team will guide you through the timeline and process, providing insight and advice on the optimal moves for you and your business, as well as customized credit and financing solutions. Coordinating seamlessly with our Wealth Management team of experts in tax liability and other legal, tax, and financial professionals, we look out for you and your best interests every step of the way. Contact Anthony Botelho, EVP, Chief Commercial Lending Officer at 401-654-4844 or [email protected] to set up a time to discuss your Commercial Banking needs.

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