Guide to Structuring a Business Purchase Agreement

Define key terms

Specifically outline the details of the purchase, including naming assets and liabilities, conditions of the sale, transitioning of the premises and employees, and how to collect outstanding accounts after the sale closes.

I recommend: Find common business purchase terms and conditions in a sample contract at Lectlaw.com.

Determine a fair-market value

Be realistic when establishing the price you are willing to pay or accept. Overpricing on the part of the seller, or a lowball offer from the buyer, will create ill will and set a contentious tone for the ensuing negotiations. An equitable price at the outset benefits both parties.

I recommend: BizPricer and MBAWare offer business valuation software and services to help determine a company's market value.

Protect your assets

If you're selling a business, include a confidentiality agreement so prospective buyers can't use or divulge sensitive information — such as financial data and client lists — that they examine while considering the purchase. If you're the buyer, incorporate a non-compete clause that says the seller may not engage in the same type of business or in the same market for a pre-determined amount of time.

I recommend: Order attorney-drafted non-disclosure agreements at Urgent Business Forms.com.

Enlist a professional

Even if you want to draw up the papers yourself, have an attorney look them over before finalizing the deal. It may cost a couple hundred dollars for the consultation, but it could save thousands — and several headaches — after the sale is complete.

I recommend: Find an attorney in your area who specializes in buying or selling a business at Lawyers.com.