There are many considerations you must consider when you are getting ready to sell your business. Most owners are quick to jump to how much money they will receive or when the deal will close. But before you spend a lot of time and energy on the sale of your business, you should take a few steps to prepare your business for sale: at worst, it will make the sale process go more smoothly; at best it will create additional value in your transaction.
One of the costliest mistakes that business owners make is not building the best team for completing the transaction. Your team should include the key people from your businesses management team, an investment banker or business broker, an accountant/CPA and legal counsel. Depending on the size and structure of the transaction, you may want to engage specialists to represent you for areas like tax structuring, intellectual property, real estate and human resources. You should surround yourself with a technically strong team because those individuals will help you build a negotiation strategy, understand the market, price your business, structure your transaction and help you allocate risk, all of which creates value for you.
One of the best ways for you to create hidden value in the sale of your business is to conduct due diligence on your own business. This means reviewing your company records, key contracts, employment agreements, intellectual property and financial statements. You want to review these documents because if you discover problems, you can fix them before a potential buyer becomes aware of them. Problems in your business can significantly impact the purchase price that you will be able to achieve and potentially reduce the likelihood that your sale will close. Additionally, if you do the diligence first, you will reduce your transaction costs, which means more money in your pocket when the transaction is complete.
Oliver Davis is a business attorney who works with clients in the areas of corporate and transaction law with an emphasis on emerging growth and established companies, mergers, acquisitions, divestitures, reorganizations, complex strategic alliances, commercial agreements, private placements and capital raises. odavis@polsinelli.com
Michael Gillette is a business attorney who works with emerging and established companies, investors and entrepreneurs across a number of industries. His clients rely on him for counsel on corporate structuring, financing, negotiating agreements, joint ventures, M&A and other business matters. mgillette@polsinelli.com
Oliver Davis is a business attorney who works with clients in the areas of corporate and transaction law with an emphasis on emerging growth and established companies, mergers, acquisitions, divestitures, reorganizations, complex strategic alliances, commercial agreements, private placements and capital raises.
Michael Gillette is a business attorney who works with emerging and established companies, investors and entrepreneurs across a number of industries. His clients rely on him for counsel on corporate structuring, financing, negotiating agreements, joint ventures, M&A and other business matters- Follow Polisinelli on Facebook and on Twitter
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