If your business has been a success, you've probably
had to pour most of your time, energy, and money into it for what may seem
like forever. You may see your company as an extension of yourself, and it
may be hard to even imagine life without it. In some cases your entire
family may have depended on the business, discussed it endlessly around the
dinner table, used it as an education and a proving ground for the children,
and practically made it into another family member!
On the other hand, your business may have been only marginally successful,
and something you can't wait to get rid of. Or, perhaps you entered into the
business with the idea that it would be a short-term opportunity and that
you'd sell out whenever you got a decent offer.
Whatever your situation, selling your business will
be one of the most important things you'll ever do, because unlike virtually
every other business decision you've made over the years, you'll only do
this once. You get a single chance to put a price tag on possibly years
and years of effort — and once you sign the sales documents, it's over.
You'll come out way ahead, both financially and personally, if you make an
effort to understand the steps in selling, formulate your plan carefully
with the help of your professional advisors, and, when the time comes, take
the time to negotiate a price and terms that satisfy your reasons for
getting out of the business.
Even if you think you're many years away from selling out, you should
consider what your heirs or successors would have to do if you died
unexpectedly. If you don't have a workable exit strategy in place, you (or
your heirs) may have no choice but to liquidate the business and sell off
the assets piecemeal, getting nothing for the goodwill you've built
up over the course of the years.
Here are the major issues you need to think about when it's time to sell
your business:
- Initial issues in selling out
How should you time your decision and choose experts to help, and what
legal/ethical pitfalls do you need to avoid?
- Valuations of small businesses
How does the market put a price on a small business, and what can you do
to maximize your own business's value?
- Finding a buyer
What do you need to know about working with a business broker, creating a
selling memorandum, and other marketing concerns?
- Structuring the deal:
What are your options as to terms, paying particular attention to the tax
implications of various alternatives?
- Financing the deal
What should you know about seller financing, and third-party financing
through leveraged buyouts?
- Completing the deal
From the Letter of Intent through due diligence to the closing, what are
the typical steps you can expect to go through in the sales process?
- After the sale
We add a few notes about your new, unencumbered life!
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