Legal Factors

Safeguarding your business through insurance, copyrights, and other legal methods will substantially increase its salability. Here are three examples of how these factors can affect value and risk in your business.


Is your business sufficiently insured? If not, an amount will need to be deducted from cash flow based on the cost of carrying adequate insurance, which will reduce the value of your business.

Intellectual Property

If your business has valuable intellectual property, it will be more difficult for a buyer to replicate it, which improves its value. 

Pending Litigation

Pending litigation will negatively affect the value of your business. If you are facing litigation, most buyers will prefer to wait until the matter has been resolved before proceeding with the transaction. Even if the threat can be mitigated for buyers with an opinion letter from your attorney or by withholding a portion of the purchase price in escrow, pending litigation will nonetheless decrease the value of your business due to the increased perception of risk.