Business owners put l time, energy, and hard work into establishing and growing their businesses. Whether your business is successful or not, there may come a time when you decide to sell your business. Even if the time is not now, you should always have a plan and strategy for when the situation to sell arises.
Preparation is Key to Success
Selling your business will probably be one of the most important decisions you will make in your life. You get one chance to price your business accordingly to reflect your effort and success. You should also determine your priorities, evaluate the timing of the sale, and assemble an expert team to help you with the sales process. You also need to understand the ethical and legal duties you face as you exit your business.
Before you start the sales process to sell your business, you must understand the steps involved. Read on to understand some factors to consider to ensure a successful sale.
- Determine what you want from the sale
- Define your priorities
- Gather professional advice
- Negotiate a good price
- Establish acceptable terms
Finally, you must go into the sale knowing what you want to achieve: what are your non-negotiable items? What items are negotiable? If you do not firmly believe in your end result, you are less likely to end up in the best possible position.
Five Factors to Know Before Selling Your Business
Business sales plans differ based on business size, complexity, and financial standing. Learn about the top five factors every business owner should consider before selling.
Business Structure and Ownership
Your business structure and the individuals who claim ownership will affect the sale of your business.
Are you the sole proprietor/owner of your business? The decisions around the sale are solely up to you and require fewer formalities.
If your business is set up as a limited liability company (LLC) or corporation, all members or shareholders must agree on the sale. This agreement can even be a corporate resolution, usually dictated by the operating agreement or bylaws of the company.
When selling a business, due diligence matters. You will be better off if you are more prepared, organized, and thorough with all business dealings and asking for the total value of your business.
You should always protect yourself and your business information when trying to sell your business. Before disclosing private information about your business, protect yourself by asking the potential buyer to sign a confidentiality agreement. Be prepared that most buyers will want to see the company’s financial records.
Employees make up an essential part of your business. Each individual needs to be evaluated with care when considering the sale of your business. The sale of your business should never be a surprise. You should discuss the deal with employees beforehand and talk to potential buyers about your employees.
Pinpointing the exact value of a business can be complex. You have likely put years of work into it. You are probably full of emotions, but you should be realistic when setting a price for your business.
It would help if you researched or sought help to determine the realistic value of your business. You can consult with a CPA or lawyers or hire a business evaluator to determine what value the marketplace has for your business and structure your sale appropriately.
The sale of your business depends on your finances and the buyer’s finances. The buyer is responsible for securing the agreed-upon purchase price of a business. If the buyer is low on cash, financial companies help finance the transaction. Sometimes, a buyer may not have enough cash to pay the entire price. Then, a financial business will step in to provide guidance and loans to finance the sale.
Selling your business is a big step. The process will be much easier if you plan and consider the many factors that go into this big decision. The final sale should be a success with a good strategy, sound advice, and a thorough plan.
If You Are Selling Your Business, Contact the Knowledgeable Philadelphia Business Lawyers at Sidkoff, Pincus & Green
The experienced Philadelphia business lawyers at Sidkoff, Pincus & Green can provide the guidance and expertise you need when you decide to sell your business. We represent clients throughout South Jersey, Pennsylvania, and New Jersey. You can call 215-574-0600 to schedule an initial consultation at our Philadelphia law office.