Many people want to buy an online business but feel unsure about legal fees, when to hire a lawyer, and what legal due diligence involves. This podcast episode answers those questions.

In this episode of the Buying Online Businesses podcast, Jaryd Krause talks with business attorney Eric Hsu. Eric helps professionals leave corporate jobs and start their own businesses by buying existing ones. He focuses on business purchases, offering advice on deal structures, legal risks, and market trends. He also shares helpful content on X, LinkedIn, and his blog. Unlike many lawyers, Eric works only on the buyer’s side, which means he is fully focused on protecting buyers.

Jaryd and Eric discuss key legal steps in buying a business, including when legal due diligence is needed, what it involves, and how much it costs for deals of different sizes. They also explain the legal work done for letters of intent (LOI), asset purchase agreements, and other contracts. The conversation covers how buyers can include legal fees in SBA loans, what can cause deals to fall apart, and how to avoid costly mistakes.

This episode is full of valuable tips for anyone looking to buy an online business. It’s a must-listen for buyers who want to protect themselves and make smart decisions.

Let’s dive in!

Episode Highlights

03:00 The smallest deal Eric worked on as an M&A lawyer

11:00 What’s the legal due diligence for online business?

17:30 Legal fees when acquiring a business

28:00 How to calculate working capital?

34:30 Silence on the seller side is a bad sign!

40:30 Where to find Eric?

Key Takeaways

➥ Buyers often skip legal work for deals under $500K, but for larger acquisitions, legal review is crucial to avoid risks and costly mistakes.

➥ Identify potential tax liabilities through diligence and manage them via amnesty filings, indemnity escrows, or increased seller notes.

➥ A well-structured LOI clarifies deal terms, prevents misunderstandings, and makes the closing process smoother.

➥ Buyers using SBA financing can sometimes include legal fees in their loan, making it more affordable to get proper legal support.

About The Guest

Eric Hsu is a business attorney committed to helping individual searchers escape corporate life and dive into entrepreneurship through acquisition. Specializing in the intricacies of business buying, he provides strategic advice on deal structures and market trends. As an active content creator, Eric shares valuable insights across platforms like X, LinkedIn, and his blog, aiding corporate professionals in their journey to becoming successful business owners.

Connect with Eric Hsu

➥ https://erichsu.me

➥ https://x.com/lawyer4SMBs

Resource Links

➥ Sell your business to us here - https://buyingonlinebusinesses.com/sell-your-business/

➥ Buying Online Businesses Website - https://buyingonlinebusinesses.com

➥ Download the Due Diligence Framework - https://buyingonlinebusinesses.com/freeresources/

➥ Connect with Jaryd here - https://www.linkedin.com/in/jarydkrause

➥ Site Ground (Website Hosting) - https://bit.ly/3JBEC1u

➥ Surfer SEO (SEO tool for content writing) - https://bit.ly/3WWMKjM

➥ Convert Kit (Email Software Provider) - https://bit.ly/3o10Xgx

🔥Buy & Sell Online Businesses Here (Top Website Brokers We Use) 🔥

➥ Empire Flippers - https://bit.ly/3RtyMkE

➥ Flippa - https://bit.ly/3wGa8r5

➥ Motion Invest - https://bit.ly/3YmJAmO

➥ Investors Club - https://bit.ly/3ZpgioR

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