Frequently Asked Questions About Selling A Business

Wednesday, November 7th, 2018
questions about selling a business

There are many reasons why you may want to sell your business. Maybe you’re ready to retire and don’t have someone to take over once you do. You may have decided that you’re ready to move on to your next venture. No matter the reason, there are always concerns and questions that can come up when you choose to sell your business. These questions and answers can help you decide if you’re ready to move forward with putting your business on the market.

When should I sell my business?

There is really no wrong or right time to sell your business. That being said, there are some things, such as the strength of the market you’re in, that can have an impact on the sale. For instance, you may find that it takes a little longer to sell your business if you’re dealing with a volatile market. Other time sensitive factors that affect when you sell include your own financial plans and your taxes.

Each of these factors and more can come into play in trying to determine the right time to sell. Speaking with a financial advisor and attorney may be beneficial no matter when you decide to do this. They can help you to decide if you should start the process now or wait until a more opportune time.

How can I determine the price of my business?

It can be difficult to determine a starting price when you sell. It often requires a great deal of research into the current market, your business type, and other relevant information. One of the best ways to find the right price for your business is to speak with an attorney. They can go over the appraisal process and advise you on how to move forward with a business valuation.

Rather than simply choosing a price based on your own feelings towards your business, it is best to get help from a third party to find the right amount. An attorney can look at the current value, earning potential, equity/assets, and even future liabilities to provide you with a number. They will make sure that the deal is fair and beneficial for you when you sell your business.

How does the sale process work?

There are several steps that need to be taken to get through the sale process. You should start with an appraisal, which will help to determine what strengths and weaknesses appear in your business. This step can assist you in improving your business before the sale. Your appraisal can also help to put a dollar amount on your business.

The next stage is to advertise your business and to get promotional information out to potential buyers. Negotiations will start occurring between you and your representatives and the buyer’s team during this time.

The last step is the finalization of the sale. This stage includes the buyer’s due diligence and the completion of the terms of the deal. Afterwards, you will convey ownership of your business to the new buyer.

What should I say to buyers?

It can be hard knowing what information you should divulge to a prospective buyer. You want to be sure that you provide them with the information that’s needed to make the sale without disclosing anything unnecessary. For example, they should know about any legal issues with your company and your assets. Often, this is where an experienced legal professional can come into play. They can best advise you on what you need to disclose to the buyer.

How long will it take to sell?

There is no set amount of time that it can take for your business to sell. There are a lot of factors that can go into the timeline. For most business sales, it can take between four and eight months. There are some cases where it can take even longer, like if you have a medical practice with a large amount of clients, paperwork, and departments. Speaking with an experienced legal professional can help you get an idea for a timeline based on your location, market niche, and company information.

Do you need an experienced attorney?

If you are considering selling your business and need more information, contact the Finance and Corporate team at Brown & Fortunato today. You can Email Us or call us at (833) 228-6300 to discuss your situation and find out more about our Practice Areas.