Mums continue strong trend towards running businesses and families
There are encouraging signs that mums continue to be inspired to set up and run their own small, and not-so-small businesses.
However for some mums, starting a business from scratch appears to be too much of a risk, and for many the perfect business idea proves elusive. For these mums and others buying a business may represent the best opportunity to go it alone, providing a ready-made and tried-and-tested concept for a budding business mum to take on.
In a similar vein, some mums who have started and operate their own businesses either before or during motherhood may decide that they wish to capitalise on their asset by selling their business, either to concentrate on motherhood, to return to employment or to raise funds for their next venture.
Buying or selling – get advice first
Whether you are buying or selling a business you should plan carefully in advance of making your move. Expert legal and financial advice will help you navigate many of the pitfalls and difficulties inherent in these processes. As well as taking appropriate advice, if you are selling a business, then you may sign a contract with a broker to assist you in finding a buyer.
The seller’s solicitor drafts the sales memorandum, a non-legally binding document giving the buyer details on the business to be traded. Potential buyers then submit their offers in writing, including payment terms. Once a fee is agreed with a buyer, the lawyers will set down to negotiate a Heads of Agreement, which will be legally binding. This document sets out the details for the sale, including the price, the period of exclusivity to complete the sale and details of what charges may be levied if the sale falls through.
The buyer’s solicitor will only commence due diligence proceedings once the Heads of Agreement is signed and confirmed. Due diligence includes legal, financial and commercial investigations.
The final sale documentation should include a sale agreement, tax deed, indemnity agreements, transfer documents for leases, licenses and contracts, and any other written evidence pertinent to the sale.
Business buying and selling mums need to be aware that there is a fine balance to be had between diligence with regard to the details of the transaction, and maintaining a healthy level of trust which fosters the completion of any deal, and helps in the post transaction period when both parties are likely to have queries and questions of the other.
Mums are advised to always enter any business transaction with a clear set of aims and objectives, which should be reviewed throughout to ensure that despite the inevitable twists and turns inherent in any business sale the end result still fits with your plans for the future. Consulting a specialist business solicitor can be the first step to ensuring your business transaction goes smoothly.
By David Waters