This is a guest post by Dyanne Ross-Hanson
You think you are ready to sell. Perhaps you’ve even received an “unsolicited offer” for your business. And are tempted to “go it alone”. Time for a reality check! You are likely not the best person to sell your business. Could you do it? Probably. You could also take out your own appendix, but that is not recommended either. The difference between selling your business "well" and "not so well" could add up to millions of dollars. Why risk the difference at this stage?
There are two major considerations in a business sale; the technical side, including taxation, legal, financial, and transactional aspects; and the leadership side which includes setting the vision, managing growth and dealing with people and family issues. Generally, you can save money on the technical side and make money on the leadership side.
On the Leadership Side
A Business Transition Coach
Think of selling your business as analogous to building a house. One of the first people you want to talk with when you are building a home is a general contractor, who helps you capture your vision, understands all the pieces, coordinates the process, and brings in the right people at the right time to get the job done. Find a facilitator who can help you to co-ordinate the process and keep you on track with your goals.
A Leadership Coach
A good leadership coach can help you to add significant value to your business by motivating you to do many of the things you always wanted to do but haven’t yet gotten around to. For example, a company that claims "our people are our greatest asset" can turn that asset into business value if they invest in their people.
On the Technical Side
Pick a Merger and Acquisitions Lawyer who has demonstrated experience in handling business deals similar in size and nature to your business. They require good business sense. They need to understand that it’s all about getting a good deal and not about being confrontational. And they need good 'chemistry’ with you. Insist upon complementary values and principles. If your goal is to do an honest, win-win deal, you want a lawyer who works the same way.
A good tax lawyer will help ensure that your after-tax costs are minimized. They will need expertise in all areas of taxation related to selling your business including corporate and personal income tax, international tax, and the taxation of trusts and estates. When you take a pro-active approach, you’ll achieve tax savings and be able to take advantage of legal deferrals available under an increasingly complex tax system.
You can probably continue to use your existing accountant if you are satisfied with their ability to meet your business needs. But, be careful that your accountant is not financially motivated to kill or defer your sale. If your business represents a significant portion of the accountant’s revenue, a sale may mean your company will no longer be using their services. If you are concerned about this, address it directly with your accountant or consider using someone else when preparing to sell your business.
A business broker or investment banker can bring experience, advice and concrete leads to help you sell your business. They’ll undertake a thorough valuation and recommend specific actions that will increase the business’s value by the time you want to sell.
Owners who have used an investment banker to help them sell their business, swore by them and couldn’t imagine selling a business without that help. Those who had done it on their own didn’t regret not having one, but perhaps they didn’t know what they didn’t know. Consequently, they may have left money on the table or worked much harder than they needed to in order to finish the deal.
A financial advisor can recommend tax-advantaged tools that will help you manage risk in the period leading up to the sale of the business and ultimately, to transform business assets to create personal wealth. A good financial advisor will work collaboratively with your other advisors to set up plans that will take advantage of advanced tax and insurance strategies to minimize, eliminate, or avoid taxes.
An Advisory Team
A timely, thoughtful approach to selling your business begins three to five years in advance of your target sell date. When you choose the right members of the team, you assemble a group of professionals with education, experience and skills who will help you to achieve your goals and prepare you and your business for transition.
Dyanne Ross-Hanson is President/CEO of Exit Planning Strategies, LLC.
A financial based consulting firm, focused on helping Business Owners develop intentional ownership/exit plans for their businesses. She directs an inter-disciplinary process for owners and their Advisory Team to explore planning options, map realistic exit strategies and develop an Action Checklist to accomplish the owner’s objectives. Her work is industry generic, outcome agnostic and owner centric. Dyanne will happily provided client references upon request. She can be reached at firstname.lastname@example.org or 651-426-0848.