Contingencies are very important when making an offer. A buyer is not likely to get full access to all of the business books and records without first agreeing to a purchase price and terms CONTINGENT on full due diligence. Contingencies to consider when making an offer:
- Small Business Financing - If you will need financing include a contingency for obtaining small business loans on terms and conditions acceptable to you.
- Include a contingency for buyer and seller to agree on a specific training and transition plan.
- Contingency for any agreements to be assumed by buyer to be on terms acceptable to buyer (example, facility leases, copier contract, machinery leases, etc)
- Contingency for background check on the business and the seller's themselves. It's important for buyer to know who they are buying the business from.
- Contingency for full review of all business records including tax returns, sales tax reports, bank statements, etc.
These kinds of 3rd party approvals can be very tricky, get good advice before heading down this path. Think through your small business ideas and build your contingencies to make sure that you've covered all the bases.