Selling a business is one of the most important financial decisions in a business owner's lifetime. Given many baby boomers' desire to retire and sell their businesses, as well as the current low interest rates making buyers' access to financing relatively inexpensive, now may be the ideal time for business owners to sell and "get their price." This may be especially true for business owners who did not sell during the "Great Recession" of 2008 and were fortunate that their business was not devastated by the coronavirus pandemic. Selling a business should be a planned and controlled process of making a business attractive, marketable and profitable. The actual sale transaction is just a part of the whole selling process. The secret to netting the most value from the sale of a business is for business owners to carefully manage and nurture the business while taking the proper steps and time to prepare for the sale. Mindful consideration of the following may be helpful to attain greater success by way of preparation:
Form a Team of Professionals Business owners are experts in operating businesses but not in preparing businesses for sale. Some sellers are reluctant to hire business brokers and intermediaries or seek assistance from their attorney, banker and accountant to prepare for the sale of their business. Many business owners unwisely focus on fees and short-term costs as opposed to long-term net-value, thereby losing bottom-line benefit from sale, increasing liability exposure and risk of overall sale and post-closing failures. Business owners using a team of dedicated and well-coordinated professionals should attain the best sale and post-sale results. Plan Well in Advance Abraham Lincoln said, "Give me six hours to chop down a tree and I will spend the first four sharpening the axe." Just as home owners stage their houses before listing them for sale, business sellers should take steps to make their business more attractive to buyers. Mindful sellers and teammates take the time well in advance of a sale to identify potential internal and/or external buyers, determine what a buyer desires and make the appropriate changes to fulfill those desires. Making the desired changes takes time and proactive planning is needed to be ready to strike when the business owner chooses. Some common planning considerations:
The 24+ attorneys at Kelleher + Holland, LLC can help you plan, prepare and execute. For more information on how we can assist you, please contact any of our corporate attorneys at 847-382-9195 or firstname.lastname@example.org.