When selling a business just one little blunder can derail the deal. Follow these 10 commandments to ensure things off without a hitch.
- It’s business as usual. Don’t become so focused on the sale of your business that you aren’t meeting your daily business commitments. It’s not uncommon for your sale to take up to a year to close, so don’t let your profits suffer in the meantime.
- Make the price tag on your business is fair. If you over inflate the price you’ll turn away potential buyers. Your business broker and/or your accountant can help you to determine the best asking price.
- Take the time to prepare in advance for the sale of your business. Keep immaculate records for several previous years, have all your accounting up to date, such as the current year’s taxes, and make sure all the legal elements are in order.
- Make sure you respect the confidentiality of the party/parties that are purchasing your business. The breach of their confidentiality could result in the loss of the sale. Utilize expert intermediaries who can handle the process respecting the bounds of confidentiality.
- Anticipate what type of information any potential buyers may ask for. For example, for a buyer to be able to get the necessary financing to buy the business will need profit and loss statements, balance sheets, appraisals, etc.
- Be flexible when it comes to closing terms. Rely on the advice of your broker or legal counsels based on the implications of taxes, etc. Don’t demand all your cash at closing, consider asset transactions and/or contingent payments.
- Don’t try to dominate the sale, instead negotiate. You’ve been the boss for a long time and are used to having your own way and the buyer may be the same. If you lock heads, you won’t get anywhere. A business broker can be a real help!
- Stay involved even when you are feeling burnt-out. While at the same time, you need to recognize that the buyer may want to keep things at an arm’s length. Use your own discretion. Just pay attention to the mood.
- If you use a business broker, it’s a little easier to use leverage through other buyer competition. It’s a great incentive but a little more difficult to pull off on your own.
- Make sure you keep the deals momentum moving forward. Keep things on schedule and don’t let the deal drag down.
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Follow these 10 commandments to sell your business and your business will be sold in no time.
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