If you’re thinking about selling your business soon, you’d better make sure you’ve considered everything.
Selling the business that you’ve worked so hard to build and grow is a huge decision. Whether you’ve lost the passion to continue on or you’ve got an offer you can’t refuse, the selling process can be complicated.
In this post, we’re going to make sure you’ve thought about every little thing before you sell your company. Keep reading and you’ll be prepared — with or without your business — to take the next step in your career.
1. What Is Your Business Structure?
The selling process can be relatively simple if you’re the sole proprietor of your business. Big decisions start and end with you, so you don’t have to consider the financial and legal impact on anyone else.
It’s when you’ve got investors and/or partners that different tactics need to be taken. In an LLC or corporation, all members and shareholders need to come to an agreement to sell the company. This usually comes as a “corporate resolution”, the details of which are determined by your operating agreement.
Things can get complicated if there’s dissension among the shareholders, making it tough to keep the company buyers interested.
2. It’s Never Too Early to Start Planning
You may not be thinking about selling your business right now, but it’s never too early to start planning and preparing. Some business owners may even start planning for a sale as soon as they launch.
It can make things less complicated down the road if the shareholder agreement is written with this in mind. Including shotgun clauses, which outline ground rules for the sale of the business, to help to avoid future disputes.
There are countless things you have to think about that can make or break a business sale, so planning early is a must.
3. Get Organized
There’s a lot of paperwork that needs to be sifted through when buying a company. If you want to expedite the process, then you need to get organized so it’s easy for the potential company buyers to do their cost-benefit analysis.
Have important documents ready to hand over, like financial statements, customer and supplier contracts, descriptions of assets, outstanding liabilities, etc. In addition, a confidential information memorandum (CIM) will provide a detailed business summary for interested buyers.
4. Don’t Necessarily Chase the Money
For many business owners, their company is their baby. It’s not easy to hand over the reins to just anyone, but many people are swayed by dollar signs.
Our advice is always to choose a buyer, not just the best offer. Pick the person or group that leaves your company in the best hands after you’re gone.
5. Don’t Rush It
Last, but not least, don’t rush the sale. If you don’t know how to sell a business in a patient and understanding way, then you’ll leave yourself and the new owners in a precarious position. The buyers need to do their due diligence, which is going to take some time.
Sell Your Company the Right Way
Now that you know what you need to think about before you sell your company, you can get the process started. Selling something you’ve spent your professional life building can be overwhelming and emotional, but also fruitful. Follow these tips and you’ll come out of this sale with the world in front of you.
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