How To Buy Or Sell A Company
How to buy or sell a business is a difficult task, being sure that you are investing in the right business that you will be able to drive to success. That will give you the returns and be profitable. On the other hand selling your business that you have created with all the hard work and built from scratch can be more complicated than just finding the right deal, it involves managing your feelings towards your business as well.
While buying a business a few things to be mindful of would be:
Research the business
Understand each aspect of the business, it may look very appealing and promising upfront, but as the perspective future owner it is important that you understand everything about it. A good thing to also find out would be the reason behind the sale of the business.
Value the business
Check the market value of the business, do not buy it just because it promises to be a success or it has very promising prospects. It is important to invest right, and to invest right an individual needs to find out exactly where the business stands.
Prepare closing checklist
Get legal advice before you close in on a business purchase. They are the ones who will make sure that all the aspects are taken care of and that you do not walk into a business set for failure.
Make purchase and sale agreement
The most important piece of paper when a business changes owners; the sales agreement details all the legal aspects of purchasing the business. Make sure you go through each detail to check that all the things discussed, have been included.
While selling a business a few things to take care of would be:
Take stock of your feelings
Many a times business owners get cold feet when they come to signing the sales agreement, it is understandable as a lot of effort goes into creating a business. Make a pros and cons list for the outcomes of selling your business, and be sure of your decision before you start advertising the sale possibilities.
Choose the right way to sell
There are many ways to sell a business, you could liquidate it, you could sell assets in a fire sale, you could give it to your heirs, sell it to the key employees of the company, or to a third party. All these aspects have their own pros and cons:
- Liquidation: While a quite preferred way to sell a business, liquidation requires a lot of rules to be followed and divides the money in various levels.
- Fire sale: The fastest way to sell of your business which would save you a lot of money that you would have to pay for employee salaries, maintenance of the business, etc. if you went a slower way. However, this method brings with it, the possibility of selling the assets at discounted prices.
- Giving it to your heirs: This is a good way to go as it still lets you keep the business in the family, however it is essential that you pass the business on to someone who is well skilled to handle it.
- Selling it to key employees: This is another excellent way to sell your business where the employees also get a stake in the business, such businesses grow faster as the motivation to succeed lies with many instead of just one
- Sell to a third party: A third party sale is also a good option if you would like to hand over everything to another person who can handle it and keep it running. This option also ensures that most of your employees do not lose their jobs.
ABOUT THE AUTHOR
Alam Qureshi is a Certified Business Intermediary (CBI), Certified M&A Professional and Broker of Record at ProClient Brokers Inc., Brokerage. He helps business owners learn how to sell a business so they can get the maximum value for their company. call us 416 364 5550 or CONTACT US to get in touch.
Date modified: 7-1-2019