9 Things We Learned About the Legal Side Of Acquiring Businesses From Interviewing Joel Ankney - Attorney and Author in the SMB M&A and Commercial Real Estate -- Watch E6 Here
Here is what my team and I learned from this interview: (These are notes from team members, writers, sometimes AI, and even listeners who submitted what i learned loosely edited and shared here) - If it seems a bit crude, you're reading our notes, so. yeah. -Ron
Concept 1: Bring the Lawyer in Last
When buying or selling a small business, Joel recommends bringing the lawyer in last. He believes that attorneys often have a reputation for killing deals and that they should only be brought in once the deal is nearly done and due diligence needs to be completed.
Joel's advice is rooted in his own experience. He remembers how he used to jump in and try to figure out the price of a deal on a napkin without any training. He then learned that there were many pieces to the puzzle that he had to understand before he could close the deal. He realized that he had to do his own due diligence and learn the basics before he could bring in a trained professional.
The process of buying and selling a small business is complex and requires a lot of pieces to be put together. It takes time to put the puzzle together and to put the deal together. Joel believes that a lot of the stuff that people uncover during the negotiation process should have been known before the negotiations process. He wants people to know what all the pieces are and how they are going to get put together.
Bringing a lawyer in too early can be a mistake. Joel believes that if the lawyer does not understand the process or prioritize the issues, they can get in the way of the deal. He recommends that the lawyer should be brought in last, after the buyer and seller have agreed in principle.
In conclusion, Joel's advice is that the lawyer should be brought in last when buying or selling a small business. He believes that the lawyer should only be brought in once the deal is nearly done and due diligence needs to be completed. He wants people to understand the process and all the pieces of the puzzle before they bring in a lawyer. Following his advice can help make the process of buying and selling a small business smoother and more successful.
Concept 2: Manage Professionals Wisely
When it comes to buying and selling a small business, it is important to manage professionals wisely. This includes understanding the process and all the pieces of the puzzle before bringing in an attorney. This will help ensure that the due diligence phase is completed and that all potential legal issues are addressed.
It is also important to understand the role of the client in managing the deal and the professionals involved. The client should be familiar with how to work with the professionals, such as lawyers, CPAs, and business valuation companies. This will help ensure that the deal is managed correctly and that all potential legal issues are addressed.
In addition to understanding the process and managing the professionals, it is important to have an attorney review the documents before they are sent out. This will help catch any potential issues that may arise. Having an attorney review, the documents can also save time and money in the long run.
Concept 3: Get Expert Advice, Including Environmental
One of the most important pieces of advice for anyone looking to buy or sell a business is to get environmental expert advice. The environment is an important factor when considering a business purchase. Knowing the environmental risks associated with a property can help buyers make informed decisions and protect their investments.
For example, if a buyer is looking to purchase a convenience store that has gas pumps out in front of it, they should hire an environmental engineer to do a phase one environmental site assessment. This assessment will help identify any potential environmental liabilities that the buyer may become responsible for if they purchase the property. It is important to understand the environmental risks associated with a property before making a purchase decision.
In addition to environmental risks, buyers should also consider other areas of the deal that require expert advice. For example, a buyer should have a CPA review the financials of the business before making a purchase. A forensic CPA can help analyze the financials and provide insight into the true value of the business.
Finally, if the buyer is financing the purchase with a commercial bank, they should have a loan officer involved in the process early on. A loan officer can help the buyer understand the amount of money that is available to them and how to make the bank feel comfortable with the deal.
In conclusion, getting expert advice is essential when buying or selling a business. Knowing the environmental risks associated with a property can help buyers make informed decisions and protect their investments. In addition, buyers should also consider other areas of the deal that require expert advice, such as financials and loan officers. Taking the time to understand the process and all the pieces of the puzzle can help make the process smoother and more successful.
Concept 4: Find a Different Deal
When it comes to environmental liability, the best advice is to find a different deal. Environmental liability can be difficult to mitigate, and it is often better to focus on finding a different deal that does not have the same issues. If the seller is not willing to put a significant portion of the purchase price in an escrow account to cover any potential cleanup costs, then it is probably best to look for a different deal. Additionally, indemnity language in the purchase agreement is only as strong as the financial resources of the seller, and if the seller does not have the resources to cover any potential liabilities, then the indemnity language may not be very helpful.
Finally, creative insurance products may also be available, but this is an area that requires expert advice and research. Finding a different deal may be the best option when it comes to environmental liability. Taking the time to understand all the risks associated with a business and its property is essential for buyers and sellers alike.
Concept 5: Help Clients Achieve Goals
Mergers and acquisitions (M&A) can be a daunting process. It requires a great deal of research, negotiation, and paperwork. But for those who are experienced in the field, it can be a rewarding experience. It is a way to help clients achieve their goals, whether it is to buy or sell a business, or to transition from one business to another.
One of the main areas of M&A is real estate. Real estate transactions involve the sale of a property, such as a dental office or a single building. It can also involve leasing the property, such as in the case of a dentist who sold his practice and is now selling the dental office. In this case, the seller holds on to the real estate and leases it to the buyer, with an option to buy the real estate at a later date. This helps the buyer to determine how much cash the business will generate and whether they can service the debt to buy the real estate.
For M&A professionals, the greatest reward is seeing the light bulb come on for their clients. It is a process of bouncing ideas off of each other and coming up with creative solutions to help the client reach their objectives. It is also a way to be a project manager, ensuring that all the pieces of the puzzle are in place at the right time.
The M&A process can be a great way to help clients achieve their goals. It requires a great deal of research, negotiation, and paperwork, but in the end, it can be a rewarding experience for both the buyer and the seller. Taking the time to understand all the risks associated with a business and its property is essential for buyers and sellers alike.
Concept 6: Secure a Successful Exit.
One of the most important steps in the M&A process is securing a successful exit. This involves having the right team in place and understanding the various risks associated with the transaction. It also involves having a clear understanding of the timeline and costs associated with the transaction.
For buyers, it is important to ask the right questions to ensure that they are getting the most value out of the deal. Questions such as what are the biggest issues they should be looking out for, how long is it going to take, and how much is it going to cost should be asked. Knowing the answers to these questions can help buyers feel more comfortable with the process and ensure that they are taking the right steps to protect their interests.
For sellers, it is important to understand the timeline and costs associated with the transaction. Knowing who the lawyers are on the other side, what the purchase price is, and if there are any leases involved can help sellers understand how long the process will take and how much it will cost. Additionally, understanding the industry and the various risks associated with the transaction can help sellers make the best decisions for their business.
Finally, for both buyers and sellers, it is important to have the right team in place. Having experienced professionals who understand the industry and the various risks associated with the transaction can help to ensure that the deal is successful. Additionally, having a team that can provide advice and guidance throughout the process can be invaluable.
Securing a successful exit is a crucial step in the M&A process. By taking the time to understand the various risks associated with the transaction, having the right team in place, and knowing the timeline and costs associated with the transaction, buyers and sellers can ensure that they are taking the right steps to protect their interests and achieve their goals.
Concept 7: Hire Experienced Attorneys
One of the most important steps in the M&A process is hiring experienced attorneys. Attorneys are essential in helping to ensure that all parties involved in the transaction are protected and that the deal is structured in a way that is beneficial to everyone. Experienced attorneys can help to protect the interests of buyers and sellers by providing advice on legal issues, negotiating the terms of the transaction, and ensuring that all documents are properly executed.
Attorneys should also be familiar with the laws and regulations that govern the transaction. They should be able to provide advice on the various tax implications of the deal and should be familiar with the local laws in the jurisdiction in which the transaction is taking place. Additionally, attorneys should be able to review and draft documents related to the transaction, such as contracts and purchase agreements.
When selecting an attorney, it is important to consider their experience and track record. It is also important to find an attorney who is familiar with the particular type of transaction that is being negotiated. For example, if the transaction involves real estate, it is important to find an attorney who is experienced in real estate law. Additionally, it is important to select an attorney who is willing to go to court if necessary. An attorney who is not willing to go to court may not be the best choice for a particular transaction.
In conclusion, hiring experienced attorneys is an important step in the M&A process. Attorneys can provide advice on legal issues, negotiate the terms of the transaction, and ensure that all documents are properly executed. Additionally, they should be familiar with the laws and regulations that govern the transaction and should be willing to go to court if necessary. By taking the time to select the right attorney, buyers and sellers can ensure that their interests are protected and that the deal is structured in a way that is beneficial to everyone.
Concept 8: Seek Professional Help for Business
When it comes to business, it is essential to seek professional help. Whether you are looking to buy, sell, or merge a business, it is important to have a knowledgeable professional on your side. Joel Ankney, an attorney specializing in mergers and acquisitions, explains that having an experienced attorney is key to ensuring that a deal is structured in a way that is beneficial to all parties involved.
Ankney points out that attorneys can provide advice on legal issues, negotiate the terms of the transaction, and ensure that all documents are properly executed. Additionally, they should be familiar with the laws and regulations that govern the transaction and should be willing to go to court if necessary. He also emphasizes the importance of selecting the right attorney, as this can make all the difference in the success of the deal.
Ankney also notes that although going to court is often an inefficient way to resolve a conflict, it can be used as leverage to get a settlement done when someone is unwilling to come to the table. He recommends that people have a lawyer in mind for those situations so that they can be sure that their interests are protected.
Overall, it is important to seek professional help when it comes to business deals. An experienced attorney can provide invaluable advice and guidance to ensure that the transaction is structured in a way that is beneficial to all parties involved. With the right attorney on your side, you can rest assured that your interests are being looked after.
Concept 9: Achieve Success Faster
One way to achieve success faster is to join a professional mastermind group. This type of group provides accountability and support to help ensure that goals are set, actions are taken, and results are achieved. Professional mastermind groups can provide invaluable guidance and insight from experienced professionals who have been in the same situation. This kind of support can be invaluable in helping to make sure that the right decisions are made and the right steps are taken to ensure success.
Another way to achieve success faster is to use the principles outlined in Napoleon Hill's book Think and Grow Rich. This book outlines the steps necessary to achieve success and provides a roadmap to follow. By following the steps outlined in this book, you can make sure that you are taking the right steps to achieve success faster.
Finally, it is important to make sure that you are taking the right actions to ensure success. This means that you need to be disciplined and focused on your goals. You need to make sure that you are taking the right steps and that you are taking consistent action. This is the only way to ensure that you are taking the right steps to achieve success faster.
In conclusion, there are many ways to achieve success faster. By joining a professional mastermind group, using the principles outlined in Think and Grow Rich, and taking the right actions, you can ensure that you are taking the right steps to achieve success faster.
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