People decide to leave the companies they built for any number of reasons. Whatever the cause, selling your business is often not an easy decision. The process itself can be challenging. The following eight steps may help.
#1. Consider Your Reasons for Selling
Selling a business is generally not a snap decision. Some of the most common reasons people choose to sell might include:
- Disputes with co-owners or partners
- Changes in lifestyle and/or retirement
- Business is not doing well
- Business is highly successful
- Economy or industry trends
- New business opportunities
After careful analysis, you may move on to the next step.
#2. Set Some Goals
At this stage, you may ask yourself some important questions:
- When would you like to start the process of selling your business?
- How much money would you like to walk away with?
- Do you need to put any time or money into the business before putting it on the market?
Setting deadlines for yourself can help keep you on track.
#3. Figure Out How Much Your Business Is Worth
You may need help with this step. Calculating your company’s actual value involves a number of complex factors. For example, you need to look at tangible assets, financial metrics, and liabilities. The value may be higher than you expected – or lower.
#4. Consider Whether to Enhance Value or Not
This is a tough question. Primarily, you need to know whether you will get a good ROI on any money you put into the business. On the other hand, you may have trouble finding buyers if there are major issues with your company.
#5. Compile Data for Potential Buyers
As you move ahead with selling your business, you need to know how to attract buyers. Gathering comprehensive information about your company generally helps. Savvy purchasers want to know what they are getting for their money.
#6. Target Buyers
Start considering who might want to buy your company. In some cases, you may need to market your business to people involved in specific industries instead of just marketing to the general public. For example, placing an ad in a trade journal for your sector or contacting a broker may yield better potential buyers than word of mouth or craigslist.
#7. Negotiate Deal
Let’s say an offer comes in. The next step in selling your business probably includes negotiation. You want to get the most for your company while the buyer hopes to pay as little as possible. With careful discussions, you may narrow the gap until you reach an agreement. For this step, involving a business lawyer could help you avoid potential legal issues.
#8. Address Legal Issues
But if those problems do arise, it’s critical that you take care of them immediately. For instance, you and the buyer may want to put your agreement in writing. If so, always have an attorney review anything before signing it.
Depending on the industry, you may also have to worry about regulatory compliance, licensing, permits, and so on. Your general counsel or business lawyer can offer valuable advice on these issues.
Give Us a Call If You Are Selling Your Business and Have Questions
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. From our Coral Springs office, we represent clients throughout the State of Florida.