If It Was Easy to Sell, Everyone Would Do It
For whatever reason, you have decided that it is time to sell your business. You have done some basic research and decided rightfully so that you need some help. Here is the thing: if it was easy to sell a business, everyone would do it. But it isn’t. There are a lot of ins and outs, and things you need to consider before you even think about selling.
If it was easy to sell a business, everyone would do it. Your real estate agent or your friend who once sold their business? They may be able to help, but when it comes time to sell, you really need a business broker. Here are some of the basic reasons why.
The Timing is Right
How do you know when it is the right time to list or sell your business? The thing is the value of your business and the likelihood you will be able to sell it vary with the time of year, market conditions, and fluctuations in your industry. A business broker will know about those changes, and can give you the best advice about when to sell.
How Much is It Worth?
Mergers and Acquisitions require a team of people for your sale to be truly successful. You will need the CPA on your team to evaluate what your business is really worth from your tangible assets to the worth of your client base, your tax liability, your annual expenses, and even the current and potential value of your stock.
These things will all factor in to what you can sell your business for. Once you have the value of your business and a letter of intent from the buyer, there are more decisions to be made.
How Should I Structure the Sale?
There are several different ways to structure your sale, from a simple Asset Purchase Agreement (APA) to a stock sale that includes payables, cash, receivables, and assets but also successor liability attached to the company.
A good business broker can help you navigate these choices and find the best one for your situation.
Due diligence can take anywhere from a few weeks to a few months depending on the complexity of your business sale. Your company’s strategic position, financial data, and other legal matters must be considered. Company value is confirmed, risk is evaluated, and financing is discussed and determined.
This period of time can bring out differences between the seller and buyer, and a broker can help you navigate these challenges. Everything must be handled in light of the fact that a closing date is fast approaching.
For the close to take place properly, there are many legal documents that need to be prepared, and usually an in-person closing is best so that both parties understand exactly what is being signed and why.
However, the deal does not always end with closing. There are post-closing issues that will arise like settling accounts payable or corporate name changes and structure modifications. The truth of the matter is, selling your business is complicated. If it was simple, nearly anyone could do it.
Need help navigating this process or want to hire a business broker to help you sell your business? Contact us here at Rogerson Business Services with your needs or questions. We are here to help.