Sell you business: Ten rules for a smooth transaction
Thinking of selling your business?
Would you like to retire? Relocate? Just want to cash out?
Before you begin, review the ten things I learned from my
experience...
1. Use common sense when hiring a lawyer.
While it's important to have an attorney review most documents,
getting your lawyer too involved may do more harm the good --
particularly if he intimidates prospective buyers.
2. Use a reputable broker
Resist the temptation to save a broker's commission by selling
yourself.
A good broker will have a large data base of prospective buyers.
Therefore, he can often sell your business for a higher price --
getting more than his commission. What's more, he can sell your
business quickly and bring years of experience that will smooth
out a million bumps and hurdles.
I was extrememly impressed with my broker. If you would like his
name and contact information, send me an e-mail at
1492@teacher.com or call me at 1-812-372-1663 -- ask for Kenny
Paul.
3. Get your financial records in order
Any reputable buyer will expect to scour your financials. Be
sure you have them in order and can answer questions as they
arise.
4. Get your legal documents in order
These include such things as contracts, supplier contracts,
staff contracts, patents, trademarks, advertising contracts, and
so on.
5. Think like a buyer
Look at your business from a buyer's perspective. See anything
that you don't like? Make changes whenever possible. And keep in
mind that first impressions are always lasting.
6. Prepare to train the new owners
The new owners will need to become familiar with your day-to-day
operations. Before you sell, be thinking of how to train the new
owners.
7. Ask high; but sell at a fair price
Expect potential buyers to pay no more than your business is
actually worth. While you can always come down from your
original asking price, you can never go up. Consult with your
broker. (Hint: If a broker wants to charge you for an evaluation
of your business, DON'T HIRE HIM. An honest broker can calculate
a reasonable asking price by reviewing your two-year financials.
And he won't charge you a dime.)
8. Don't over-negotiate
By holding out for the very best price, you may end up losing
the sale altogether. Dragging out the negotiations benefits no
one.
9. Put everything in writing
Protect yourself and expect your buyers to protect themselves.
It's just good business to make sure essentials contracts are
written and signed. Again, a lawyers review may be in order.
Your broker will know exactly the contracts that need to be
signed.
10. Go
Hit the golf course, move to your new location, start the new
business...whatever it is you had in mind, say so long to the
business and get on with the good things in life.
About the author:
Recently went through selling process. Here's what he learned.
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