#SELLING MY BUSINESS CHECKLIST HOW TO#
#SELLING MY BUSINESS CHECKLIST FULL#

Work with your M&A attorney and CPA to discuss the tax implications of different deal structures and your possible tax liability (examples: asset vs stock purchase, Section 1202 gain exclusion, state tax implications).

Time is your enemy - changes inside the business (departure of key employees) or outside (regulatory risks, industry shifts) can kill the deal.

The purchase is still far from completion!

A letter of intent (LOI) is a mostly non-binding document outlining the proposed terms of the deal.

Work with your business advisory team to make sure you're not disclosing more than you should early in the process.

Get potential buyers to sign a non-disclosure agreement.

Here are some other tips to consider before the deal closes: But during this time it's essential to ensure you hit revenue projections, profitability goals, and other key financial metrics. Selling a business is time-consuming for business owners, even when they have an advisory team.

While an active deal is in process, it's important for the business to operate as planned. During that time, there's a lot that can go wrong, so keep focus and be careful not to pre-spend anticipated proceeds or mentally retire before the finish line. It usually takes between 3-12 months to close a deal. You're in the process of selling your business, but the deal hasn't closed yet What are your income needs? Do you have plans for a major purchase? This will help determine how much cash you need from the sale of your business and whether to consider the pros and cons of arrangements like an installment sale. In working with your personal financial advisor, discuss your plans after the sale of your company. So before getting wooed by complex deal structures and tempting tax-minimization strategies, take stock of your wants and needs. But there's no sense in spending time on options that don't align with your objectives or financial needs. There are a lot of ways to sell your business and attorneys can be quite creative. Do you want to sell 100% of the company at closing and walk away with the cash? Do you want to pass the business to family members or employees? Are you willing to keep working for 3-5 years after selling all or a portion of the business? How important is it that the brand continue? What are your cash needs? Define your goals and financial needsīefore going too far down the path of exploring all the ways to sell your business, first consider your goals for the transaction.

#SELLING MY BUSINESS CHECKLIST FULL#

Similarly, selling a non-controlling stake in the business would be less desirable than a full acquisition.Īs you and your advisory team consider the best approach in selling your business, it's helpful to consider how deal structure can affect valuation. For example, the valuation of the company if sold using an employee stock ownership plan (ESOP) likely wouldn't be as high if the business was sold to a competitor. It may be helpful to discuss different estimated valuations under various sale structures too.

#SELLING MY BUSINESS CHECKLIST HOW TO#

When wondering how to sell your business, ask what buyers would be willing to pay today?

Understand the real-world value of your business in the current market by working with a valuation expert, business broker, or investment banker. There's a lot of complexity to consider: structure of the deal, ways to retain key employees, tax planning, cash flow planning post-close, etc., so it's really important to work with a team of specialists that can help you navigate your options.

Selling my business checklist