Planning how to sell your business - bizjournals:

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The time spent in the planning process is the best insurancr that this critical transaction will be successful andthe seller’ s goals will be met. •Timing. The structure and goals of the transaction shoulx be developed well in advance of the sale solicitation Knowing where you are going and havingt a plan for how you are goingy to get there are the keys to any successful The same is true for sale of a Fairly evaluating your business and establishint yourpricing goals, structure and timing for the transaction are criticalo for a successful transaction. •Transactiob team.
Your first step is to put together your transactionn team consisting ofyour attorney, accountant and investment advisor. Your attorney should be experienced in conductina transaction. The due diligence processa is critical to preparing the company for sale and to controllin post closingliability exposure. Negotiating the 50-10 0 page purchase agreement requires knowledge of what are the appropriate transaction terms for this type of Your accountant should be conversant in the tax issuese relating to the structure of the transaction and the ways to minimiz etax costs. With your investment advisor you are hiring contactsd inyour company’s transaction experience and negotiating skills.
He should be the primaryg contact with buyers and the primary negotiator of thebusiness terms. If your current professional advisors are not experiencedx in conducting asales transaction, you need to expand your team to include experienced advisers. If your current advisors resist they do not have your best interests at hearft and should not be onthe •Negotiation team. While the owner knowws the business best, the owner is generally the poorest evaluator of the market value of the businese and the worstdirect negotiator.
It is virtuallhy impossible for the owner to divorce himselg from the emotional attachment to the that inmany cases, he startecd and grew through years of hard work and sacrifice. The sale process has to be as devoid of emotionas possible. The valuation procesw needs to be objective and withi n the normal pricing parametera and deal terms forthis business, in this industry, in this To do otherwise will only create price disappointment on the part of the owner of the company is finallyy sold and is likely to hinder the solicitation procesa by communicating that the owner has unreasonable expectations.
While the ownedr will be the finaldecision maker, the investment advisodr and attorney should be the frontline negotiatords of the business and legal •Preparation process. The transactionh preparation processis critical. The team will undertak an intensive internal due diligence processw in which the strengths and weaknessese of the businessare identified. The weaknesses (such as environmental issues, possible litigation, regulatory violations, and accounting must be addressed and resolved if atall possible. Unresolvex problems are risks to thepotential buyer, and risks are translated into reducee purchase price.
Strengths (long-term contracts, customer relationships, strong managemenft team) are items that will be highlighte d by the investment advisor in the sale With input from the investment advisor regardinb valuation of the business and input from lega l and accounting on the most efficient lega l and tax transaction the owner and the transaction team will decidw on the proposed transaction value and The investment advisor will prepare solicitation materials describing the company and the propose transaction for use in thesolicitationh process. This process rangesw from targeted solicitations to a limitef list of potential purchasers to abroader “auction” process.
The scoper of the solicitation process will depend uponmany factors, including the owner’d willingness to let the world know his businesses for This decision can have a direct impacg on values received. •Truisms. There are many characteristicz that are consistent to virtually every This transaction will be the most emotionally draining eventy of yourbusiness life. The transaction will take significantlu longer to close than you initially The transaction costs will be highed thanyou expect. Time is the enem of every deal.
But, as has been outlinef above, to maximize value and to increase the likelihoods of asuccessful transaction, the planningt process must begin early, you must engage a team of experiencesd advisers, and you need to followa their advice. During the sale process, try as best you can to continue to run your business and let your advisorz deal with the day to day issuez of thetransaction process. If you follow these few guidelines, you will greatlu increase the likelihood of asuccessful