You have worked hard to build your business. Whether you are looking to retire, want to free up some cash, or simply wish to move on to another venture, selling a business is a big step that requires due diligence and careful planning.
If you are considering selling your business, it is critical to work with an experienced business lawyer. There are myriad issues involved in the sale of a business, including potential tax liability, employee concerns, and transactional issues. With this in mind, here are three considerations when preparing to sell your business.
Set (Realistic) Goals
For most business owners, a primary goal in selling a business is generating a profit. If your business is struggling, however, you may be selling to reduce liability. Also, some business owners wish to remain involved after the sale – something more common in family-owned companies. In other situations, an owner is content to cut ties. By determining your goals in advance, you are much more likely to approach the sale strategy and negotiations with clear expectations and a cool head.
Know Your Value
Just as people are sometimes unable to recognize their own faults, so too do business owners occasionally overlook problem areas in their own companies. For this reason, it is important to obtain a comprehensive business valuation. Identifying weak spots early can help you improve or correct them prior to your business hitting the market.
Don’t Go It Alone
As a business owner, you are likely an expert in your particular field. Whether you are in manufacturing, sales, or the service industry, you have a tremendous knowledge base. On the other hand, you are probably not an expert in selling a commercial property or preparing the documents required in a complicated business transaction. If you attempt to handle the sale of your business without professional help and experienced legal counsel, you could end up getting far less than the true value of your business. Worse, you could make a costly and time-consuming error.