Planning to Sell Your Business? - Know Who Should be on Your Team

Planning to Sell Your Business? - Know Who Should be on Your Team

Needless to say, business owners should not try to sell their business on their own. There are too many moving parts of the process that must be managed while doing the job of running a business; and business owners can be their own worst enemy when trying to engage in complex negotiations on their own account. The process can be too lengthy, complex, and emotional for anyone who cannot focus one hundred percent of his or her time and attention on the strategy and minutiae.

Because it is vital to have a solid plan in place, the search for experienced professional advisors should begin well in advance of a sale. The advisory team needs to have the necessary expertise to handle a business sale transaction, and they must have the capacity to work in a collaborative fashion to ensure the coordination of strategies, tactics and outcomes.

The Business Seller Intermediary

The importance of engaging an experienced business seller intermediary, as discussed earlier (How do I go about selling my business), cannot be underscored enough. When it is done right, the process of selling a business is a full-time endeavor. The business seller intermediary will take on the arduous tasks of due diligence, writing the memorandum, finding qualified buyers, narrowing the field, negotiating terms, and finalizing the deal - all on behalf of the seller so he or she can continue to run the business.

The Attorney

A business owner’s legal counsel is often his or her most trusted advisor; however, they may not have the specific background or expertise to evaluate, much less create the contracts and agreements involved in a business sale transaction. The attorney must be fully engaged throughout the process, evaluating letters of intent, advising on employee agreements, and writing and enforcing NDAs. And, when it comes down to the final negotiations and structuring of a deal, it is important to have a battle-hardened “deal” attorney with a solid reputation in business transactions.

The Accountant

The accountant plays a vital role in many facets of a business sale, from preparing the seller for the sale, assisting in the valuation of the business, overseeing the due diligence process, structuring the deal for tax advantages, and acting as a sounding board in the final negotiations. The tax implications of selling a business alone can be extremely complex, requiring a specific expertise and level of experience limited to CPA firms that specialize in business transactions.

The Financial Advisor

The sale of a business will impact every aspect of a business owner’s financial life. Chief among the immediate decisions that you will have to make are the disposition of the sale proceeds and their tax ramifications. As a business seller, you not only need a comprehensive investment strategy in place prior to the sale, you will need a well-coordinated plan for enhancing your wealth through tax planning, protecting your assets, and preserving your wealth well into the future.