No matter the reason, when selling a business, it is important that the business owner and advisors understand the broader reasons for the sale to ensure that the deal is structured to achieve the seller's goals.

What are the most important steps that should be taken prior to selling a business?

1. Get the right team of advisors in place

In a business sale (or purchase), it's important to have three main advisors involved:

• Legal Counsel
  • Your attorney or legal team will assist you with the deal structuring, negotiations, drafting documents, the due diligence process, and mitigate any potential risks the deal may possess. Sound legal counsel will ultimately assist in getting the deal to closing and ensure the seller gets paid.
• Accountant/CPA
  • An accountant or CPA will focus on the business's tax returns. They will have a better sense of what the tax situations are, will weigh in to make sure there are no tax issues with the deal, and will assist with the structuring of the deal to make sure it is as tax efficient as possible.
• Broker
  • If you don't have a buyer in mind, a broker will assist in finding one. A good broker will provide other value as well by determining what the seller's business might be worth and pushing the deal to closing with some key deal process points.

2. Doing your pre-sale due diligence

A potential buyer is going to dig deep and look at any issues with your customers, the governance within the organization, and will make sure the assets they are buying are what they think they are. The buyer is doing their due diligence, so it is important that the seller does theirs as well. Discuss any issues that may need correction with an attorney. It is better to correct any issues up front than to wait for the buyer to find them. A buyer could use those issues as leverage against the seller to reduce the purchase price.

In the following video in the thumbnail image below, business attorney Nick Oertel sits down with fellow attorney and moderator Patricia Scott on an episode of Second Wednesday Morning Break to discuss: Key Considerations for Selling Your Business. This session goes into aspects of selling your business such as:

• How to evaluate and choose advisors
• Doing your pre-sale due diligence to protect your assets
• Tax impacts of a business sale
• Types of business sale structures
• Common mistakes that most sellers make
• The stages of a sale once a buyer has been found:
  • Confidentiality Agreement/Initial Discussions
  • Letter of intent
  • Due diligence process
  • Signing the definitive purchase agreement
  • Closing
  • Post-closing items