How to Approach Selling Your Business - VR Business Sales Blog

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Friday, February 24, 2012

How to Approach Selling Your Business

JoAnn Lombardi
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When a business owner makes the decision to sell, it can be instantaneous. It can be made after years of planning or quickly through thoughts of retirement, personal or family matters. Regardless of the reason, the goal of selling a business remains the same, maximizing what you receive from the sale.
Businesses change hands every year. Because this will be one of the most important transactions you will make in your life, you should approach it with careful and concise planning. It should be the same time and energy that you have dedicated to building that business. That’s why we have prided ourselves on being the flagship company in our industry, assisting in the successful transactions of 100s of thousands of business through our decades of experience and wealth of resources.
When the decision is made to sell the business, there are some pointers to follow in making sure the transaction is successful.

Standing by the Process
It’s not uncommon to change your mind about selling the business, but you should stand by your decision to sell once you make it. This is especially the case with family businesses, where it’s important that every member that has a stake in the business is on board with selling to a qualified buyer. If there are stockholders, private equity groups or other partners that have a stake in the business, they need to be involved in the process.
Deciding the Point Person for the Sale
If there is more than one person that has ownership with you in the business, it should be agreed upon who will be the point person for negotiating the sale. Too many people involved will lead to confusion, and cause the business sale to falter.

Establishing Deadlines
One helpful thing to do during the process of selling your business is to set deadlines such as for the completion of the selling memorandum, letter of intent, performance of due diligence and completion of the definitive agreement.

Communicate with Your Landlord and Banker

If your business is currently under a lease, you should speak to your landlord about what your plans are. They may not agree to terminate your current lease agreement let alone change it to another person who they haven’t even met. There are plenty of accounts from sellers who were in the final stage of signing the deal with the buyer, and the sale is killed because no one consulted with the landlord. They nor bankers like surprises, and will not be cooperative if you haven’t kept them abreast of what’s happening.
Readying for Buyer Due Diligence
Prior to VR marketing your business and searching for prospective buyers, you will want to put together all the information regarding your company – financials, vending contracts, distribution and purchase agreements, leases, licenses, intellectual property and goodwill documents. When VR does find you a qualified buyer for your business, they are going to want to perform due diligence, examining every aspect; therefore, be ready.
Informing what should be Included in Letter of Intent
If you know that the buyer will be submitting a Letter of Intent, you will want to inform them immediately what items you will want included. This will include:
  • Price and terms;
  • What contracts and warranties are to be handled;
  • Lease or purchase of real estate;
  • Responsibility for employee contracts and severance agreements;
  • Schedule for due diligence and closing. 


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