Entrepreneurs: Avoid These 5 Mistakes When Buying a Business

Buying a business can be the best decision you ever make as an entrepreneur. Certain missteps, however, can turn a dream venture into a nightmare investment. Listed below are 5 common mistakes people make when purchasing a business, many of which can be avoided by doing your homework beforehand. Mistake No. 1: Choosing the Wrong Business It is surprising how many entrepreneurs buy a business that’s completely Read More

The Honeymoon is Over: Understanding the The Importance of Partnership Agreements

When two or more people enter into a business partnership (typically done through an LLC or Corporation, but can be done through general or limited partnerships), their main focus is on growing the enterprise and turning it from a concept into a successful creation. During this honeymoon period, everyone tends to feel energized and positive. They don’t take the time to define what it is they actually should be doing, Read More

Flat Rates: Focusing on the Outcomes Not the Hours

Most law firms bill for their services using “billable hours.” In other words, the client pays for the time of lawyers to complete the project for them. This practice can be inefficient, not reflective of value conferred to the client, and susceptible to abuse. The billable hour was widely adopted by law firms in the 1960s. A lot has changed since then, including unbelievable technological advancements. For Read More

Blurred Lines: Understanding the Difference Between Employees and Contractors

The question of whether someone you hire to work is your employee or independent contractor can be a potential minefield if you aren’t somewhat familiar with these two different and distinct categories. The minefield that occurs when the lines between the two are blurred and misunderstood can be expensive, in both time and money. Colorado starts from the presumption that all people who work for someone else are Read More

A Brief Introduction to Drag-Along Rights

In its simplest form, a drag-along right is a provision that  entitles the majority shareholder to force the minority shareholder to sell his shares upon the same terms and conditions at which the majority shareholder is selling his stake. This right prevents the minority shareholder from refusing to sell his shares in case a buyer wants to buy all the shares of the company. When is this right Read More

The Advantages and Disadvantages of an Earn-Out Agreement for Sellers

As the owner and potential seller of a business, it’s only natural that you may value the company at a greater amount than a prospective buyer. So what can you do when you and a potential buyer are at odds over the fair purchase price of the business? One option is to utilize an "earn-out” agreement. An earn-out agreement is a mechanism in a transaction whereby a portion of the purchase price is contingent (and Read More

5 Steps to Take Once You Decide You Want to Buy a Business

So, you’ve officially decided that you want to buy a business. Now what? Purchasing an existing business can be a fantastic way to dive into the world of business ownership without some of the risks associated with a true “start up”. Or perhaps you are interested in increasing your current holdings by adding an existing company to your business. Either way, once you’ve made the decision that you want to Read More

Time Vesting vs. Milestone Vesting

When you start a company or offer equity rights at any time, it is oftentimes a wise choice to including a vesting requirement. The manner in which vesting occurs will depend on the specific circumstances, but generally speaking, it means that whomever is receiving the equity will be required to wait a period of time before gaining full control of it. Vesting serves as a significant incentive to ensure that Read More

The 3 “D’s” That Should Make You Think Twice Before Buying That Existing Business

If you want to own and operate a business, it can be hugely beneficial to purchase an existing operation. Ideally, when you purchase an existing business you will be able to hit the ground running and avoid many of the challenges and growing pains inherent in starting a company from scratch. However, not only has an existing business had time to become well-established and successful, it has also had time to Read More

Business Planning: 6 Strategies to Help You Exit…Stage Left

Whether you are a seasoned entrepreneur or you are just thinking about the possibility of starting or purchasing your own business, it is vital that you understand the concept of an “exit strategy.” In terms of business, an exit strategy is your plan for leaving the company you own. Ideally you will be exiting because you have achieved all your goals and are ready to move on, preferably with a nice profit. You may Read More