The Ultimate Guide to Buying and Selling a Business by Ira Nottonson

 A very thorough treatment of the subject of buying and selling a business.

Sometimes, I even learn new terms.

 "Changing your profit and loss statement (P&L) from one used for tax purposes to one used for selling purposes is called reconstituting your P&L."

Note that this is not in any way a fraudulent procedure, but that there are certain legitimate deductions which are placed in a P&L for your tax returns which are not really "losses" from the point of view of the owner of a business, such as depreciation on real property and equipment, or the leasing of a business vehicle, among other things.

A good thing to remember about what the highest priority of a prospective business owner is and should be.

"Business-buying candidates are always looking for the largest income they an generate, which they usually equate with the largest investment they can handle."

On early negotiations, and the process of trying to put together a deal,

"Profit and loss statements, together with balance sheets and cash flow analyses, should not be necessary at this point (first meeting between buyer and seller). If you have a face-to-face conversation with the seller, you will resolve many questions."

This one I found interesting,

"Balloon payments were quite reasonable in real estate, because many people didn't live in the same house for more than five years. They normally sold their houses, which allowed them to pay the entire note before the balloon payment came due. In addition, the housing market is relatively stable and easily financed compared with the small business market."

Really? Ah...this was written in 2005 before the boom and crash of the U.S. real estate market.

Though very thorough, much of the information on franchising, business brokers, and the responsibilities of accounts and lawyers in the business acquisition process were sections I skimmed. The chapter on non compete and nondisclosure contracts was pretty interesting, however. I've signed some NDAs in my time, so it was good to get a professional's opinion on how these things are enforced, and stressed the importance of a good exit interview (of which I have never seen the point before) in setting expectations on that score for departing employees.

There's a good "wrap-up/review" section at the back of the book that reiterates some key concepts, such as the P&L statements, cash flow analyses on accrual and cash basis and other issues to consider when buying or selling a business.

Great resource for budding entrepreneurs.