A couple weeks ago, we discussed things that business owners need to keep in mind as they prepare to sell their business. The sale of an established business is a complex process; one which can be precarious for your financial health and the long-term health of your company. Because of the risks and complexities involved, you may want to seek the help of an experienced business law attorney.
In today's post, we'll discuss a few more considerations that weren't mentioned in our previous post. These tips first appeared on BizJournals.com, and they have to do with exiting your business on a timeline and in way that best works for you.
When we mentioned business valuation in this previous post, we noted that a professional appraiser would likely consider both tangible and intangible assets. When assessing the intangible assets, you need to answer an important question: How much value will the business have once you are no longer running it? You'll need to decide:
- Whether your business relies on a particular set of skills or expertise that you have
- Whether you could reasonably train a successor to learn the skills/expertise mentioned above
- Whether the success of your business relies on your close relationships with vendors and customers
- Whether your successor could also build such relationships
Additionally, please keep in mind that successful transfer of ownership depends on stakeholder support. If you have employees, will they trust and be able to work well with the new owner? If it's a family business being transferred through internal promotion, does the rest of the family support the change in leadership? Are your employees and other stakeholders being rewarded in any way for their loyalty and continued commitment to business success (stock options, for instance)?
These are just a few of the many considerations when getting ready to sell your business. If you have worked tirelessly to make your business the success that it is today (and you almost certainly have done so), please don't risk the business' future success by cutting corners now. Working with an experienced business law attorney can be one of the best ways to ensure a smooth and successful sale and transition.