| ent"> | | | | will give a fair value to begin negotiations with. |
| So finally the time has come to sell the business. | | | | Keep in mind though, an appraisal is an estimate |
| After investing years of your time and uncounted | | | | of the fair value of a business' hard assets, and |
| thousands of dollars, it has become successful, | | | | the market value of the business may be higher |
| providing for your needs and wants, and it's time | | | | or lower, as a business is only worth what |
| to enjoy the fruits of your labor. Where do you | | | | someone else is willing to pay. |
| start? | | | | Determining major terms and price are issues |
| A good time to start thinking about selling a | | | | that you are going to have to work out with your |
| business is right after startup, when it shows | | | | broker, but a few basic factors come into play: |
| signs of beginning to succeed and become | | | | what do you want to get out of the sale? |
| self-sustaining. Even if you are planning on | | | | Continuing salary? Lump sum? Stock options? This |
| bequeathing it to your progeny or a partner, it's | | | | is a step often overlooked until late in the |
| never too early to think about what will happen | | | | negotiations, often to the detriment of the seller. |
| afterwards. | | | | Financing the sale is usually about 90% left to the |
| The first step is to take your time--selling a | | | | seller. If you can't or won't be willing to cover the |
| business is a complex process and you will only do | | | | costs of the sale, it may not be a good time to |
| it once. Confidentiality is a necessity at this point, | | | | sell. |
| as word of an impending sale can cause | | | | Once you and your broker have located a buyer |
| repercussions among employees and business | | | | and agreed on a price, a Letter of Intent is |
| partners (suppliers, customers, etc.) alike. | | | | drafted. This letter outlines the terms and |
| Your position in the business is also a point to | | | | tentative price in a non-binding document and |
| consider. If you are the sole proprietor, the | | | | allows the buyer time to thoroughly investigate |
| decision is yours alone. However, if you are a | | | | the business. This process is subject to Due |
| partner or board member, selling your part of the | | | | Diligence, as the onus of discovery is placed upon |
| business will involve more considerations. | | | | the buyer and buyer's agent. |
| Finding a good broker is worth any amount of | | | | After the discovery process is completed to both |
| time needed to locate one you are comfortable | | | | parties' satisfaction, the Purchase Agreement is |
| with. Check the Better Business Bureau for any | | | | drafted. This set of paperwork creates a formal |
| investigation history, and get referrals from fellow | | | | agreement between buyer and seller regarding |
| business owners or from industry associations like | | | | purchase price, terms, and other legal details. |
| the International Business Brokers Association | | | | Once the respective lawyers have finalized the |
| (IBBA). This is a non-profit "trade association of | | | | details and complied with state law requirements |
| business brokers providing education, conferences, | | | | regarding the sale, the Purchase Agreement is |
| professional designations and networking | | | | signed, closing documents finalized, and the sale is |
| opportunities" (IBBA), as well as professional | | | | complete. If everything has gone well, it's time to |
| certifications and boasts over 1300 members. | | | | breathe a sigh of relief and start planning what to |
| Next, a professional appraiser should be consulted, | | | | do with all that free time! |
| as just like selling a home, a professional appraisal | | | | |