2014 has been more of a prime year for business owners to consider selling their business since the bottom fell out of the market in 2008. Stock prices have been rising, interest rates have been at historical lows, and the economy in general has been improving over the last few years. These conditions may make selling a wise fiscal decision. In general, the process can take 9-12 months.
These are 3 common mistakes to avoid during the process:
1. Lack of Due Diligence of Potential Buyers
When selling your business, it is just as important for you to research potential buyers as it is for them to research your company. Taking the time to do your due diligence can affect your earn-out structure and limit your risk of not receiving your payments from the sale. Knowing the solvency of your potential buyers, the reputation of the buyer and/or their management, and the reputation of the buyer in the marketplace are some of the key factors to consider.
2. Forget It Is Business and Get Emotional
Selling your business is time consuming and can easily become frustrating. You will have terms that are important to you in the sale of your business and so will your potential buyers. It can be tempting for business owners to cave and agree to terms that are not beneficial to them, merely because of their frustration with the length of the process. It is important not to allow your emotions to get the best of you. Sometimes it is best to walk away from a deal, even if you have invested months of your time with the potential buyer. Bottom line, if the deal absolutely doesn’t make sense, cut your losses and walk away.
3. Not Consulting With Experts
Most business owners are undoubtedly experts in their field of business; however, this does not mean that the business owner is also an expert in the sale of his or her own business. Selling your business is a complex undertaking that should not be taken lightly, as there are significant legal and tax implications involved. Corporate and business law attorneys are experts in strategizing and negotiating the best deal for you as a business owner. A good corporate and business law attorney can help you to bring in a certified public accountant or other expert whenever there are complicated tax or other issues that need to be resolved.
If you are considering selling your business, contact Business Law Attorney, Michael Burnett at 678-905-4450 Ext. 3. www.msb-law.com/ MICHAEL S. BURNETT, LLC.