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| Thinking of Selling?
You have 3 Options |
How would you go about selling your business? You
have about 3 options:
- Sell Yourself:
You can sell your business on your own through a
network of business associations and contacts
Issues:
Listing and presenting your business properly. Don't
forget that you need to manage your day-to-day operations
at the same time you are selling your business.
Your challenge is to present your business to a
vast network of potential buyers from around the
region and country.
- List Your Business with the Media:
You could publish a small ad in targeted media plus
list your business with online business-sell networks.
Issues:
Same as the first option. Plus, you have the challenge
of keeping your sale confidential from your competition
and employees.
- Sell Through a Professional Broker:
Let an expert prepare the necessary documentation
and find qualified buyers. Plus arrange all related
meetings to close the deal.
Issues:
Cost. Professional brokers perform services based
on percentage of the closed sale. But those payments
are generally re-coup since the broker understands
the dynamics to maximize your value.
There are pros and cons for each method used.
Our advice is as follows:
Inside This Guide
Regardless of your selling method, the process of
selling your business is same. You will need to:
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| First Task, Put It
Down on Paper |
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| There are a Number
of Biz-Sell Online Networks |
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| Screen and Qualify
Your Buyers Before the Showing |
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| Company Visit by the
Buyer |
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| Enter Into Closing |
After a successful due diligence, the buyer will
move to close the deal. This is the process that involves
several parties, including:
- closing attorneys:
this may involve an independent closing attorney
representing both parties; usually the buyer and
seller will have their respective attorneys involved
to review closing documents.
- financing lenders:
generally the buyer may require financing from a
lender or other party.
- others:
respective parties such as your broker.
The closing may require agreements on several fronts:
- how will the buyer finance the purchase:
if the buyer is doing an outright purchase (either
through an investment or lender financing), this may
not be an issue. But in many cases, you will find
that the buyer may require seller financing.
This involves you financing a portion of the purchase
under negotiated terms of 5-10 years. This is not
a bad option, since it will give you the right to
assume back the business if the buyer fails to meet
their payment obligations.
- will the seller remain with the company
during the transition:
it is common for the seller to assist the buyer during
the transition. This is particularly common if the
business have distinct customer contracts or brand
name recognition.
You need to negotiate with the buyer your role, the
time required for the transition, and fee. In most
cases, the seller will receive a per diem
fee for assistance.
- non-compete clause:
in some cases, the buyer may request a non-compete
clause that prevents you from competing against the
buyer for a period of time (usually 1-2 years).
- use of your brand name:
if you business success carries the name of the seller;
i.e., Smith's Auto Parts, the buyer may negotiate
a period of time where they can continue to
use your name while they build up the new brand.
This may involve joint name in the brand: Smith &
Wesson
to be followed by: Wesson & Smith
to be finalized by: Wesson
Again, this may involve a year or more and is generally
included in the goodwill price of the company.
- other:
there are many other issues that may require representation
from a broker to protect your interest.
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| How We Can Help |
This is your ultimate goal — transferring ownership
to the buyer. Money exchanges will take place. Contract
agreements begin to take effect.
This is the role that we can play — preparing,
listing, presenting, negotiating, and closing the
sale of your business. Get the professional advice
you need to manage this process.
For more information: click
here
The Novars Group is a professional business brokerage
operation with expertise in business transfer and
sales. Our services include:
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