You put your business up for sale. You were just testing the market, trying to gauge the value for your small business. when you are chugging down your morning espresso, you get the call all small business owners dream about. “We have found a buyer willing to purchase at your asking price!”
You swerve off the road and a rush of emotions flood through your head. Did I lowball my business? Can I survive off of this number for the rest of my life or will I need to do something else?
After you recover from your initial shock/jubilation, you need to move forward. You need also to be aware from importance of transfer process. After several years of experience on the Business Brokerage a list of best practice you need to be aware at the level of having a serious buyer are :
- HIRE YOUR ATTORNEY FIRST: Do not sign anything related to the transaction until after you have brought your attorney on board.
- EVERY PROSPECTIVE BUYER MUST SIGN NDA: If you have a standard non-disclosure and confidentiality agreement (often referred to as a “NDA”) then ensure your broker presents it to every prospective buyer prior to entering into discussions about your finances
- BEWARE THE LETTER OF INTENT: Do not sign the letter of intent without an attorney reviewing. Be careful. While letters of intent are typically non-binding, there can be language that is binding on the parties.
- KNOW THE BUSINESS TERMS: You want to save money? Negotiate the business terms ahead of time. A diligent seller should have had a valuation with a Business broker done beforehand. Use your broker for the business terms and ask yourself the following questions:
Is the payout structure? Are you self-financing?
Is Buyer demanding an escrow?
Does Buyer want you to sign a non-compete? Can you live with the restrictions?
Does Buyer want you to provide consulting services? For how long? Will there be compensation? Do you need benefits?
What are you selling to the Buyer? Are there assets you will be retaining from your business?
Finally, selling is not easy. You have made a decision to sell. You have a buyer and you want to get it done tomorrow. It took you years to build up your business. Exercise the patience and utilize the resources needed to sell it right and for the buyer to buy it right
We will be happy to assist sellers and buyers. Both parties have different interests. As we can help clients understand where their interests align and where they diverge. Give us a call at (438) 765-5838, or email us at firstname.lastname@example.org