FAQ

Both a closing agent and your personal attorney are attorneys, which often leads to confusion over the difference between the two. A closing agent is merely a vendor, if you will, or consultant providing services, whereas an attorney is obligated to represent your best interests above all.

An attorney represents the client as a fiduciary, meaning that the attorney has to put the interest of the client above all other interests. He can be brought on at any point in the transaction. As a fiduciary, an attorney representing either a buyer or a seller can advise the client on the risks of accepting a particular set of deal terms and what is customary for different deal terms.

A closing agent, on the other hand, is engaged specifically to put the deal together: to prepare the transaction documents for the parties to review, handle the deposit, and pay out all of the parties at the closing table. Importantly, a closing agent does not have a fiduciary duty to any of the parties. According to the Florida Bar, a closing agent is not permitted to suggest terms to the parties for their deal. This distinction is important to bear in mind especially when a business buyer or seller has never completed such a transaction before.

Get Your Free Copy of The Guide to Buying a Business where you’ll learn the Secrets to the better and less risky path to business ownership!

It’s always best to bring on an attorney early in the buying process because some decisions that are made at the beginning stages may have legal implications that could impact the success of your purchase. Moreover, from a practical point of view, it’s difficult to go back to a seller to renegotiate something once you’ve agreed to a particular provision. Therefore, when you are beginning the process of buying a business or considering providing a letter of intent on a business, it’s best to get an attorney involved to discuss the deal terms you think you are going to offer and review them with the attorney in advance.

Even if you’re farther along in the buying process, you should still get an attorney involved to help with legal due diligence and drafting the final transaction documents to avoid the legal landmines that surely lurk.

Learn more about the 7 stages of your business purchase.

A business buyer or seller can engage an attorney at many points in the transaction. An attorney could be brought on to negotiate and draft a letter of intent, help conduct due diligence, or draw up the final purchase agreement. In these instances, the attorney would more than likely be working on behalf of either the buyer or the seller as a fiduciary. This is your “typical” attorney-client relationship.

Attorneys can also act as the closing agents, which means that they are preparing the final closing documents for the parties to review. They’ll handle the deposit and pay out all of the parties at the closing table. As a closing agent, the attorney is merely a consultant or service provider and has no fiduciary duty to the parties to the transaction. Closing agents are typically paid one half by buyer and one half by seller. The important thing to remember about closing agents is that they cannot provide legal advice to you, and you must determine for yourself whether or not the deal structure is appropriate.

Learn more about an attorney’s role in your business purchase.

Seller’s discretionary earnings (SDE) is a calculation of the net monetary benefits that come out of a business. It’s calculated by taking the net income of the business and adding back the owner’s salary as well as all of the benefits that go to the owner (e.g. travel expenses, health insurance, tax payments, interest, and amortization). Other expenses may be added provided that they are not necessary to the operation of business.

SDE is one metric used by brokers, business owners, and business buyers to determine the value of businesses. In combination with a value multiplier, the SDE helps arrive at a reasonable value estimate for a business. The view is that all of the benefits of the business are available to pay for the business itself, less, of course, a reasonable salary for the owner for working in the business.

Traditionally, SDE is used for businesses that have $1 million or less in gross revenue, and EBITDA (earnings before interest, taxes, depreciation, and amortization) is used for businesses that are in excess of $2 million in gross revenue. The area in between $1 million and $2 million is a little bit gray, and you can use either metric to determine cash flow. This area is also precisely where it’s important to have an experienced and qualified team on your side to assess the valuation methods of the seller or buyer.

Learn more about business valuation methods!

A business should have Profit and Loss Statements (P&L), and it should also have balance sheets for the end of each of its fiscal years. Most buyers will focus on the P&L Statement as a reflection of the cash flow and benefits received by the owners of a business. However, you should also look at the balance sheets of the business, as well as other statements of cash flow and changes in shareholder equity. When looking at the balance sheet, it’s important to understand that the balance sheet consists of a list of assets and then a list of liabilities. If you take the total assets of the business and deduct the liabilities, you arrive at the owner’s net worth in the business.

These other statements help you determine whether or not the operation of the business is being financed by the owner or if it has a substantial portion of debt. The purpose of looking at and comparing all of these financial statements is to determine whether or not each of the financial statements is accurate. If they don’t match up, then you’re able to see that there is a problem either because the records haven’t been kept properly or because the owner is trying to hide something.

Learn more about the process of buying a business!

Most business purchases will have a seller financing component, and an all cash deal is quite rare. This means the total payment will be divided between the down payment and the amount financed.

There are two options for financing the purchase of a business. One is a bank loan, the second is seller financing. The best deal for the seller is to have a third-party lender finance the transaction. If there is a lot of goodwill associated with the purchase, then what typically happens is you must finance with an SBA guaranteed loan.

The down payment amounts for financing vary, as well as the length of the repayment schedule. For seller financing, the down payment wouldn’t be less than 30%, but usually it’s more in the range of 50-60%. The interest rate would typically be a couple of points above prime, with a payment schedule in the three-to-five year range.

With an SBA guaranteed loan, the payment schedule will typically be seven years, and the down payment can be as low as 15-20%. However, there are some limitations on the amount of goodwill that can be financed and some requirements about your experience in order to secure an SBA-backed loan.

Learn more about the transaction cost!

A single agent broker is a broker that represents only one party to the transaction. A single agent owes a fiduciary duty to his client, meaning that he has to act in that client’s best interest, he can advise the client on the terms of the transaction, and he must inform that client of any communications with the other party. In other words, a single agent broker is an extension of the client.

In Florida, though, the vast majority of brokers act as transaction brokers. They represent the transaction, not an individual party, and they don’t have a fiduciary duty to either party. It is important to get written confirmation of whether a broker is acting as a transaction broker or as a single agent broker prior to the time that you begin your work with them.

Finally, a single agent broker should not be confused with a listing agent, seller’s agent, or buyer’s agent. These are simply designations as to who brought what party to the deal and do not determine whether you have a single agent relationship or a transaction broker relationship.

Learn more about working with business brokers!

Both a closing agent and your personal attorney are attorneys, which often leads to confusion over the difference between the two. A closing agent is merely a vendor, if you will, or consultant providing services, whereas an attorney is obligated to represent your best interests above all.

An attorney represents the client as a fiduciary, meaning that the attorney has to put the interest of the client above all other interests. He can be brought on at any point in the transaction. As a fiduciary, an attorney representing either a buyer or a seller can advise the client on the risks of accepting a particular set of deal terms and what is customary for different deal terms.

A closing agent, on the other hand, is engaged specifically to put the deal together: to prepare the transaction documents for the parties to review, handle the deposit, and pay out all of the parties at the closing table. Importantly, a closing agent does not have a fiduciary duty to any of the parties. According to the Florida Bar, a closing agent is not permitted to suggest terms to the parties for their deal. This distinction is important to bear in mind especially when a business buyer or seller has never completed such a transaction before.

Get Your Free Copy of The Guide to Buying a Business where you’ll learn the Secrets to the better and less risky path to business ownership!

A business buyer or seller can engage an attorney at many points in the transaction. An attorney could be brought on to negotiate and draft a letter of intent, help conduct due diligence, or draw up the final purchase agreement. In these instances, the attorney would more than likely be working on behalf of either the buyer or the seller as a fiduciary. This is your “typical” attorney-client relationship.

Attorneys can also act as the closing agents, which means that they are preparing the final closing documents for the parties to review. They’ll handle the deposit and pay out all of the parties at the closing table. As a closing agent, the attorney is merely a consultant or service provider and has no fiduciary duty to the parties to the transaction. Closing agents are typically paid one half by buyer and one half by seller. The important thing to remember about closing agents is that they cannot provide legal advice to you, and you must determine for yourself whether or not the deal structure is appropriate.

Learn more about an attorney’s role in your business purchase.

Seller’s discretionary earnings (SDE) is a calculation of the net monetary benefits that come out of a business. It’s calculated by taking the net income of the business and adding back the owner’s salary as well as all of the benefits that go to the owner (e.g. travel expenses, health insurance, tax payments, interest, and amortization). Other expenses may be added provided that they are not necessary to the operation of business.

SDE is one metric used by brokers, business owners, and business buyers to determine the value of businesses. In combination with a value multiplier, the SDE helps arrive at a reasonable value estimate for a business. The view is that all of the benefits of the business are available to pay for the business itself, less, of course, a reasonable salary for the owner for working in the business.

Traditionally, SDE is used for businesses that have $1 million or less in gross revenue, and EBITDA (earnings before interest, taxes, depreciation, and amortization) is used for businesses that are in excess of $2 million in gross revenue. The area in between $1 million and $2 million is a little bit gray, and you can use either metric to determine cash flow. This area is also precisely where it’s important to have an experienced and qualified team on your side to assess the valuation methods of the seller or buyer.

Learn more about business valuation methods!

A single agent broker is a broker that represents only one party to the transaction. A single agent owes a fiduciary duty to his client, meaning that he has to act in that client’s best interest, he can advise the client on the terms of the transaction, and he must inform that client of any communications with the other party. In other words, a single agent broker is an extension of the client.

In Florida, though, the vast majority of brokers act as transaction brokers. They represent the transaction, not an individual party, and they don’t have a fiduciary duty to either party. It is important to get written confirmation of whether a broker is acting as a transaction broker or as a single agent broker prior to the time that you begin your work with them.

Finally, a single agent broker should not be confused with a listing agent, seller’s agent, or buyer’s agent. These are simply designations as to who brought what party to the deal and do not determine whether you have a single agent relationship or a transaction broker relationship.

Learn more about working with business brokers!

Our firm concentrates exclusively on business law matters. Mr. Alexander has represented clients in business acquisitions and sales, financing transactions, technology licensing and intellectual property assets, creation of partnership agreements, LLC operating agreements, shareholder agreements, employment agreements, and stock-option plans.

Additionally, Mr. Alexander brings a healthy entrepreneurial and business background to your legal matter having worked in the technology sector as a systems engineer and product manager. He is also a licensed Florida business broker.

Our entire practice revolves around and is focused on business. The extensive legal and entrepreneurial experience of Mr. Alexander allows us to provide strategic advice to our clients so they can more effectively and realistically grow and improve their businesses.

Call us at (407)649-7777 or email us to discuss how we can help you start, buy, grow, or sell your business.

As a smart business owner, you know that time is money. But “free consultations” at most law firms are nothing more than 20–30-minute data-gathering sessions. You’ll fill out a bunch of forms, shake hands with an attorney, and walk out the door with no clarity on your legal issue.

As business owners and entrepreneurs ourselves, would never waste your time. We have a well-oiled intake system that allows us to get all form-filling done early. That way, during your consultation, we can get to know the unique aspects of your legal issue and begin working on your matter. We’ll discuss realistic alternatives, you’ll receive practical advice, and you’ll leave with an actionable plan. In short, we’ll actually do work on your matter.

So that we can complete work for our clients in a timely fashion, we only schedule a limited number of initial consultations per week. Consultations are available:

• Monday afternoon,
• Wednesday morning or afternoon, and
• Thursday morning.

The appointment is 45–60 minutes. Your appointment will be held here in our offices at 11602 Lake Underhill Road, Suite #102, Orlando, FL 32825.

Our initial consultation fee is $350. The fee can be paid by credit card or check prior to the consultation or at the consultation.

Contact us now to schedule your consultation!

Yes. Full 45-minute to 1-hour telephone consultations are available for potential clients who are outside of the Orlando area. Video conference calls are also available. The $350 consultation fee must be prepaid.

Any pre-consultation forms, questionnaires, and checklists must still be completed and submitted electronically. Also, any documents you would have brought to an in-person consultation should be emailed to us prior to the telephone consultation.

Call us at 407.649.7777 or email a team member to schedule a consultation now.

When you come to the initial consultation, you should bring any documentation that you have that could possibly apply to your matter. It’s better to have more documents (even if some end up being irrelevant) than to not have enough.

Also, prior to our consultation you may have received an informational package or email from the firm that contains specific forms, checklists, or questionnaires. Make sure you have read these carefully and have them with you. These documents will facilitate a productive conversation.

Call us at (407)649-7777 or email us to schedule your initial consultation!

At our firm we have an hourly rate range of $425 to $525, depending on the attorney and the scope of the work. However, we also offer fixed-price services in instances where the scope of the project can be solidly defined. The billing method for your particular matter will need to be determined after we’ve discussed your situation.

Contact us now to schedule a consultation!

For many reasons, one of which is simply that we can. Because we have so much experience in this field, we can accurately estimate the time we will need to complete certain services. This creates a better situation both for our clients and for us. We both know how long this matter will take and the overall cost. Other services are necessarily billed hourly.

But as a matter of principle, we offer fixed price services for three reasons. First, because the time we spend working on the matter has no bearing on the value of the matter to you. For instance, if we were the slowest lawyers in town, should it cost you more?

Second, as business people and entrepreneurs ourselves, we aren’t comfortable not knowing the cost of something up front. We extend this same courtesy to our clients whenever possible.

Finally, hourly billing can drive a wedge between client and attorney. Clients often worry about being nickeled and dimed to death, so they don’t call their counselor when they should. We want you to feel free to call or email us when you need help. A quick question can save lots of money and problems later on.

Check out our menu of legal services!

In certain practice areas, we do have service packages with fixed-fees. For example, we offer Single- and Multi-Member Entity Formation Packages and a Partnership Design System, a four-step process, which addresses key partnership formation issues and creates a fully-customized partnership agreement for up to three partners.

For any services that fall outside of these pre-defined packages, though, you will need to meet with us or a member of our team to discuss your issue in depth in order for us to estimate the cost of our services for your legal matter. Accurately quoting a price over the telephone based on a 5–10-minute conversation is very difficult.

First, some legal matters seem deceptively simple but actually require a lot of leg work. Imagine an infographic from one of your favorite business websites. The graphic is, by design, a simplified version of a larger data set. Obtaining and analyzing the data was probably time-consuming, but so was the creation of the infographic itself. If we look at the end goal of your legal matter, it may seem simple—like the infographic—but accomplishing that goal can be laborious.

Second, your situation is unique, and we won’t know what has to be done until we talk. Suppose you called your doctor and said, “I have a pain in my side. What will it take to get it fixed?”

Your doctor would (hopefully) respond that she isn’t sure, and that she’d have to examine you to see what’s wrong. Over the phone, she’d have no way to know whether you had a sunburn or broken ribs!

The same applies to your legal situation. You may call and tell us that you need a contract drafted. Without detailed information, we don’t know the kind, the scope, or any particulars of the contract.

You can schedule your initial consultation right now by calling us at 407-649-7777, submitting a contact request, or by sending us a direct email!

We look forward to hearing from you!