Today we have the pleasure of interviewing Mr. Blen Gee, a partner at Johnson, Hearn, Vinegar & Gee, PLLC. Today we discuss valuation, taxation, financing, franchises, and what business owners can do to protect themselves from being sued and what to do if they are sued. Valuation is very subjective. I frequently see a broad range of values for similar businesses. Very often a business will be valued quite low for tax purposes. A similar business may be valued quite high in the event of a litigation. There are “rules of thumb” for various industries. This can give the prospective seller a ballpark idea of the value of his company. However, a more sophisticated valuation is essential in setting the market price.
Key Points from our Conversation
- It is important for the buyer to realize that his risk in the transaction is substantially greater than the seller’s risk.
- No matter how attractive the deal appears, it will quickly become unattractive and increasingly expensive if the buyer does not establish early in the negotiations that he will not sign an unreasonable contract and will not take any unreasonable risks.
- For both buyers and sellers, the lawyer should be involved long before drafting a letter of intent.
- I think the most important thing for your readers is for them to understand that online or digital transactions can be just as binding as a paper transaction closed in a lawyer’s office.
- The big advantage of a franchise is that it provides a business model that works.