You have decided to sell your business. Congratulations! So now, what happens next?
Hiring a broker is an important first step, as we can help you through the sales process, while you continue to run your business and plan your future. Whether your choose to go it alone, or you use a Business Broker, here are the 10 steps you will go through to sell your business.
1. Figure out when you want to sell – Once you have an exit date in mind meet with your Attorney, CPA and Financial Advisor to make sure they are aware of your plans. They can make sure your business has all documents ready for a sale. Leases, vendor agreements, employee contracts, tax issues all need to be reviewed prior to a sale.
2. Determine a sales price – This is one of the most important decisions made in the sale of a business. If you price high then you will not be successful in selling, price too low and it costs you thousands of dollars.
3. Prepare package for perspective purchasers – Anyone buying your business will want to get information about the business. You will need to provide a description of the business, discuss competitors, have a growth plan and disclose some financial information and explain why you are selling. Make sure you are protecting yourself with a non-disclosure agreement.
4. Find a buyer – You will need to make sure you market your business to attract a buyer while at the same time keeping a possible sale away from your employees and customers. You will need to be available to talk with all interested parties to find possible buyers.
5. Meet with the buyer to present and sell your business – The buyer will want to see the business, products and processes. You will need to explain all aspects of your business.
6. Negotiate the sales agreement – Once you have found someone interested in your business you will need to negotiate the terms of the sale. These include sales price, owner carry-back, non-compete agreement, financing terms, closing date, due diligence period, transition plan, etc.
7. Work with the buyer to get through due diligence and financing – The buyer’s advisers and bankers will want to get copies of tax returns, leases, employee records, etc. Bankers will also need you to complete forms for their approval process.
8. Send the purchase agreement to a deal attorney who can prepare the final closing documents – These documents will include the terms of the transaction, elements of transition plan, non-
compete agreement, inventory lists and other components. In addition, these documents include your reps and warrants. You will need to represent that you have provided all accurate information.
9. Schedule closing and sign documents – Generally the buyer and seller meet together with the attorney to sign all the documents in person. If this is not possible forms can be signed independently.
10. Close the transaction – The attorney will collect and distribute all funds.
Managing this process, while continuing to run your business is no easy task. Contact Vantage Business Brokers and let us do the work while you focus on planning your future.