Selling a Business: Finding a Buyer and Informing Employees
Provided by HG.org
Preparing to sell a business is a long and complicated process that may start the moment the company begins. Getting matters together, filing paperwork, finding a buyer and transferring the ownership all comes after the organization has been setup for steady revenue and employee retention.
When the owner of a company is ready to sell his or her business, the long, complicated and difficult process begins. Some entities require years before they are ready to be sold to the best suited prospect. Other may only take several months. To attract a buyer, the owner needs to show that revenue is constant with slight dips down and elevations attributed to certain employees and products or services. Additionally, all legal matters must be in line including regulations, ordinances and laws for corresponding concerns. These processes may take the owner to other companies and clients for projects and ventures.
Selling the company may be similar to selling other large items such as houses or structures. There are persons that must be notified, officials contacted, clients and employees involved in these matters and financial data to align. The more attractive the figures and factors, the more likely prospective buyers will be interested in the company. Certain workers may be highlighted as great salespersons. Other responsibilities may arise as the processes progress. If the new owner has already been included in the sale, the dealing requires a contract with conditions, provisions and terms. It is important to have a lawyer to either draft these documents or assist in editing them.
Seeking Potential Buyers
When initiating a plan for selling the business, it is important to meet with and seek out prospective buyers. These persons should be interested in purchasing the company from the information that has been provided. They may have contact through a broker or agent, and an intermediary could be in conference or the sole contact until the buyer is willing to follow through with the next process. Because most deals go through a broker or agent, there may be additional meetings and paperwork involved in the sale. Some meetings may involve marketing and advertising the company based on numbers, employee and clients associated with the products or services.
The current owner of the company may find a broker beneficial as well to obtain a valuation of the company. This information is important to potential buyers so they know what is entailed with the purchase. The value of the business reflects more than simple sales, and this is essential data for the owner to possess as the company grows, expands or shrinks. He or she is also able to market and advertise sales for the organization when the profits, perceived value and cash flows are fully understood. This may also increase awareness within the company and attract more loyal employees and clients.
Preparing Employees and Management
Communicating to management, strategists and employees is important for the owner when preparing the company for sale. Explaining objectives and goals may achieve the desired outcome that he or she has in mind for the business. Contact should be open and suggestions taken to maximize all potential. When the owner is able to effectively explain why the sale will occur, others within the company may plan and prepare appropriately. Outside guidance is beneficial through an agent, lawyer and broker. One or more of these individuals may lead to advice and recommendations on what to do next and how to perform certain actions.
With a properly implemented strategy, overall revenue may increase, employees may be compensated and potential buyers may find the company more attractive. Small steps such as transferring phone numbers and passwords for future owners are important details not to overlook. There should be a transition period for the company employees and management when retained through the sale. This process permits greater success with the change. The type of sale should be discussed with legal professionals to ensure validity, legitimacy and the best deal for the seller. After all preparations have been completed, documentation should be finalized with the buyer. Then, it is time to transfer the company to the new owner and conclude arrangements with any remaining liabilities.
Business Lawyers in the Sale of a Company
A business lawyer should be retained throughout the life of a company, but if he or she is hired only for the sale, it is important to ensure all documentation has been analyzed. Certain transactions and interactions may require examination before closing.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.