Steps to take to prepare your business for sale

A good business plan includes an exit strategy. When you're ready to sell your business, a number of crucial steps have to be taken to get the best possible return and protect against future liabilities. Those steps include preparing your business for sale, negotiating the terms of the sale, conducting due diligence, and documenting the sale. Here let's go over some key aspects of preparing for the sale of a business.

First, it is important to ask which is better for your specific situation: a sale of the entity or a sale of individual assets? A benefit of selling the entity, including all of its liabilities, is the relative simplicity of the transaction. However, the sale of individual assets may attract buyers who want to avoid liabilities bound up in the purchase of an entity. In any case, you'll want to consult with a business law attorney about choosing a method of sale that protects your interests.

Your business should also be accurately valuated. You're not likely to get the best possible deal unless you have a clear picture of what the business is worth.

In connection with an accurate valuation, it is important to ensure that your business is organized and well documented. You can protect against liabilities by clearly documenting your business dealings, both internal and external. A business law attorney can help organize and present these documents to offer a clear picture of the entity or the individual assets you intend to sell.

Another smart business move in preparation of a sale is to effectively advertise what you have. An accurate list of services, products and operations, along with the purchase price, should be made available to potential buyers. A business law attorney can help you create an effective sale memorandum, as well as a confidentiality agreement requiring that potential buyers not share sensitive details about your business.

Attorneys at Shulman, Bastian & Hodges LLP handle a wide variety of business transactions, including sales and purchases. You can learn more about our full-service business law firm by visiting our main website.

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