Seven things you must do before selling your company: part 5
You have prepared your business for sale: increased sales, increased profits, strong management team, improved the value detractors and got your house in order. It is now time to take your business to market and see the results of your efforts.
The process of selling your business is like no other sale you have been involved with in your business career. It is different than buying real estate, different than selling your products and different from selling your home. It can be a complicated process, but not difficult if you have a team pulled together that has been there before.
Many business owners have figured out new business actions in the past, so it is a natural reaction to take this process on by yourself. DON’T…this is the single most important transaction of your career and it pays to have the support of a team that can steer you in the right direction and maximize your results.
6.) Get your team together
Pull together a team of professionals that can help you navigate the process.
A.) Business intermediary – A business intermediary is an individual or organization that can sell your business for you. Manage the process and help you maximize the amount you receive for your business. A business intermediary might be a business broker or investment banking firm. These firms will market your business and manage the process. A general rule of thumb is a business broker works with companies that have a value less than $5 million and an investment banker that will provide an auction like service for companies with values over $5 million (these ranges vary by organization). Find a business intermediary through referral if possible and always check references.
B.) Attorney – You may have a business or personal attorney that has supported your organization for years, but do they have acquisition transaction experience? Some of the more difficult deals that get done are due to an attorney on one side that has not done any/many transactions making issue over items that shouldn’t be and miss areas to protect you. Find an attorney that has the transaction experience and in many cases they will partner with you and your trusted attorney.
C.) Accountant/Accounting Firm – Your accounting firm can help you and your attorney structure the deal to help minimize taxes. It is also helpful if your accounting firm has assisted other owners in the sale of their business. They can be very beneficial in assisting during the due diligence process as well as working with you to understand the tax implications of your transaction. In the end it is all about what you take home from the sale of your business.
D.) Financial planner – Hopefully you have worked with a financial planner during the early stages of your planning process to understand how much you need to take home from the sale of your business to fund your lifestyle after selling your business. Now is the time for your financial planner to get involved with managing the proceeds from the sale of your business. They are a key player to help you achieve your lifestyle and legacy goals.
E.) Business consultant – A business consultant can help you in the preparation of your business prior to going to market, but they can also help you through the sales process. Business consultants that have worked transactions can help you manage the due diligence process, answer any questions that arise during the process and can help you work with your other advisors to make the process as enjoyable as possible. Selling your business is very stressful and having someone that you can confide in will help ease the process.
This is the most important transaction of your career, so get the right team together to help manage through the process. Take advantage of their experience in managing the transaction process to increase the chances that you end up with a positive outcome and experience. More in-depth information is available in my book, “Owner Exit Planning: Leave on your terms”