If you’ve received an offer to buy your business, you might be eager to sign off, cash out, and move on to other opportunities. But before you accept any offer for your business, make sure you’ve completed the following steps:
Step 1: You’ve learned what your business is worth.
Buyer offers are notoriously low, especially those that are unsolicited.
It’s up to you to understand what your business is worth—and what it could sell for when marketed to a pool of qualified buyers.
Work with a valuation specialist to understand the value of your business (your broker can likely set you up with one), and don’t settle for the first offer you receive unless it sits firmly within an expert’s valuation estimate.
Step 2: You understand what the buyer is asking for.
Buyer contracts can be complex.
Sometimes, they include requests for assets you didn’t plan to sell, such as real estate, vehicles, furniture, or art.
They may even include requests to categorize the sale of business assets as ordinary income instead of capital gains, which often benefits them far more than it will you at tax time.
And, further, they could make demands for your time post-sale, either as an employee or a consultant to the business.
Read every line of the contract you receive, and make sure you understand it fully. Then, you can negotiate any item that doesn’t suit you.
Step 3: You’ve consulted with an attorney.
An attorney can be a great resource through the sales and negotiation process. Be sure to work with one who can help you navigate offers, negotiate to your benefit, and make informed decisions.
Would you like to connect with an attorney? Click the Connect button below to get started.
Even after you accept an offer, there will be tasks on your plate, which could include closing your business entity, filing your final taxes, maintaining records, and assisting after the sale. We can help you work through each step. Log into your owner’s portal for the articles and resources you need to get started.