There are often times when entrepreneurs may have to make a crucial decision – whether they wish to sell their company or not. Be it for retirement purposes or simply to move from one venture to the next, owners must consider all aspects of their business before selling it to another individual or entity.

Conducting the due diligence required on your part helps ensure you not only enable a smooth transition for all individuals employed in your organization but also make sure you get the best value for the company. It will also help deem if it is the right time to sell your company or if you should hold on for a while for a better deal.

After discussing with some experienced entrepreneurs, we have listed a few vital aspects that must be thought of before putting a company up for sale.

What is the Value of the Company?

Several business leaders across the globe have always suggested and shared the importance of conducting a thorough valuation of the company before deciding to sell it. Failing to do this may result in you either leaving money on the table or saying no to an offer you’ll never get again.

Either way, unless you know and are sure about the real value of your company in the market, you shall always be taking a risk in the process.

• While the price of the company is usually discussed and negotiated by the seller and buyer, it is important for the seller to weigh all figures and variables and know their company’s exact value in the market.
• Consider salary guarantees, stock payouts, payments, a future ownership stake, and various sale provisions before finalizing any deal.

Besides, the right buyers will make sure to do their due diligence as well while ensuring they make the right deal too. Furthermore, contacting foreign companies trying to enter new markets will not only help get an excellent price for your company but help build a strong global network as well.

Is it the Right Time to Sell the Company?

The time when you choose to sell the company can make a huge difference when it comes to the deal you can get for your business. You need to match personal, business and economic aspects and compare them to ensure any deal related to your company does not affect your life in any way.

• You need to compare various aspects and find the right opportunity to sell your company.
• In addition, you must look for large financial groups that are planning to grow around the globe through efficient acquisitions. Such entities are most likely to offer a good deal for a valuable company that can help them with smooth expansion.
• You must also make sure to not delay this decision for too long or, as mentioned before, you may miss out on an excellent deal. If you find a buyer with a positive mindset and progressive plans for your company at a time when you are comfortable to go through with the deal as well, do not let the opportunity pass.

How much would it Cost to Sell the Company?

This is definitely one of the most important questions for owners to consider when planning to sell their company. There is no definite answer to this question, as there is a wide range of aspects to consider when you need to calculate the right price for your company. It is a once-in-a-lifetime opportunity and, therefore, you must only trust experienced professionals to take care of such a deal. The expenses you need to worry about may majorly include the cost of hiring the professionals you need for the deal such as M&A advisor, lawyers and tax advisors.

From advisors for sale and purchase of the company to lawyers and tax advisors to take care of the legalities related to the deal, you need to hire and consider the expenses managing such a team for your company’s deal. Besides, if you have heard the saying ‘being cheap can be an expensive mistake’, this might be the best opportunity to apply since avoiding to spend a few bucks now can significantly impact your odds of finding the right deal for your company in the future.

How do I Sell my Company?

Although you may be an expert in your industry, selling a company is usually a once-in-a-lifetime deal. While you know your business, trusting an experienced advisor with the intricacies of sale deals is always the best approach.

• Selling a company is a complicated process, for which you must know the timing, prices, market condition, while being a proficient negotiator as well.
• In addition, you must have adept skills to manage the documentation and sale-related paperwork and know how to find the best buyer who can pay the most.
• Several aspects are decisive for such deals while others must be confidential for the success of the deal. Such vital aspects must be trusted to an advisor, who will guarantee confidentiality and exclusivity of the deal.
• You need to focus entirely on your company and strengthening its value to ensure you get a good deal and maintain profitability.

Assemble Your Team of Experts

Selling a company demands you to assemble a team of proficient professionals who can guide you through the entire transaction. During the process, you shall need legal, tax and business-related advice, which may not really be your forte. However, assembling or hiring a team of experts who can deal with the complications of such deals will ensure that you not only get the best deal but face no potential challenges in the process either.

Your team of experts must include a certified public accountant (CPA) or tax attorney, a business broker and a transactional lawyer.

Get the Offer in Writing

Once you have found the right person to sell your company to, it is strongly advised to get the offer in writing.

• A simple letter of intent (LOI) would not be considered as a proper offer.
• You will need to get a stock purchase agreement or asset purchase agreement to establish the deal.
• A few details that must be included in a usual purchase agreement are the price, terms, due diligence period, due diligence documents, contingencies, and the closing date.

It is highly advised to not take up this responsibility on your own but trust your legal team to take care of the paperwork and review the necessary documents. By trusting the experts for the job, you shall avoid any potential complications and draft a valid document that establishes a legal sale of your company.

Offer Details Must Remain Confidential

Over the years, it has been quite a common occurrence where business owners share details of mind-blowing deals that are not yet complete. Or, they have shared vital details of the deal with employees, who often sell out such information to competition even before the deal is complete. This can be extensively damaging when you consider that there is a chance of the entire deal getting cancelled.

Besides, any leaked detail of the deal cannot only give your competition the opportunity to grab the deal but also lead to potential cancellation of the whole agreement between you and the buyer.

Conclusion

Pondering over the above-mentioned seven aspects must be a priority for any business owner before they sell their company. These vital aspects help ensure that you get the best price for your business, while ensuring a smooth transition for your employees and all business-related processes as well.

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