Planning how to sell your business - bizjournals:

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The time spent in the planning process is the best insurancr that this critical transaction will be successfuol andthe seller’s goals will be met. •Timing. The timing, structurr and goals of the transaction should be developed well in advancd of the salesolicitation process. Knowing where you are going and having a plan for how you are goinv to get there are the keys to anysuccessfup journey. The same is true for sale of a Fairly evaluating your business and establishing yourpricingg goals, structure and timing for the transaction are critical for a successfuk transaction. •Transaction team.
Your first step is to put togethere your transaction team consisting ofyour attorney, accountantr and investment advisor. Your attorney should be experienceed in conductinga transaction. The due diligencde process is critical to preparing the compang for sale and to controlling post closingfliability exposure. Negotiating the 50-100 page purchase agreement requires knowledgd of what are the appropriate transaction terms for this type of Your accountant should be conversant in the tax issuexs relating to the structure of the transactionj and the ways to minimizdtax costs.
With your investmenty advisor you are hiring contacts inyour company’s industry, transaction experiencr and negotiating skills. He should be the primary contact with buyers and the primarty negotiator of the business terms. If your current professional advisoras are not experienced in conducting a sales you need to expand your team to includeexperiencecd advisers. If your current advisors resist this, they do not have your best interestd at heart and should not be onthe •Negotiation team. While the ownerd knows the business best, the owner is generally the pooresy evaluator of the market value of the businesds and the worstdirecg negotiator.
It is virtualluy impossible for the owner to divorced himself from the emotionalo attachment tothe business, that in many he started and grew through yeards of hard work and sacrifice. The sale proceszs has to be as devoid of emotion as The valuation process needs to be objectivwe and within the normal pricing parameterss and deal terms for this inthis industry, in this market. To do otherwised will only create price disappointment on the part of the owned of the company is finally sold and is likely to hindetr the solicitation process by communicating that the owner has unreasonable While the owner will be the finaoldecision maker, the investment advisor and attorney should be the frontline negotiators of the business and legal •Preparation process.
The transaction preparation processis critical. The team will undertakre an intensive internal due diligence process in whichh the strengths and weaknesses of the businessare identified. The weaknessesd (such as environmental issues, possible litigation, regulatory violations, and accounting must be addressed and resolved if atall possible. Unresolverd problems are risks to thepotential buyer, and risks are translaterd into reduced purchase price. Strengthds (long-term contracts, customer strong management team) are item s that will be highlighted by the investment adviso in thesale process.
With input from the investmen advisor regarding valuation of the business and inpurt from legal and accounting on the most efficien t legal and taxtransaction structure, the owner and the transaction team will decidre on the proposed transaction valure and structure. The investment advisor will prepare solicitation materialsa describing the company and the proposed transactionm for use in the solicitation This process ranges from targetec solicitations to a limited list of potential purchasers to abroadeer “auction” process.
The scope of the solicitation proceszs will depend uponmany factors, including the owner’s willingnesw to let the world know his businessesx for sale. This decision can have a direct impac t onvalues received. •Truisms. There are many characteristicsx that are consistent to virtuallyevery transaction. This transactionn will be the most emotionally drainingg event of yourbusiness life. The transaction will take significantly longef to close than youinitially anticipate.
The transactionn costs will be higher than you Time is the enemy ofevery But, as has been outlined to maximize value and to increaswe the likelihood of a successfuol transaction, the planning procesas must begin early, you must engage a team of experiencec advisers, and you need to follow theifr advice. During the sale process, try as best you can to continure to run your business and let your advisors deal with the day to day issuez of thetransaction process. If you folloaw these few guidelines, you will greatly increase the likelihood of asuccessful transaction.