Key Factors in the Successful Sale of Your Business
The 'Key Factors' In The Sale Of Your Business:
• Maintaining Confidentiality and Disclosures
• Reaching the Largest ‘Universe’ of Potential Buyers
• Achieving the Highest Selling Price
• Maximizing Your Net Cash at Closing
• Minimizing Taxes
• Minimizing Risks and Liabilities After the Sale
The highest sale price for your business will be realized if the sale is part of a well-executed exit strategy.
If you need to sell your business and you are not properly prepared for presentation to buyers and their formal due diligence you will be at a severe disadvantage in the transaction. In order to minimize these disadvantages you should insure that you are teamed with a business broker who has extensive transaction experience. At any given time there are hundreds of business for sale opportunities in Las Vegas or any given market. These include franchises for sale, owner-operated businesses, home-based businesses, internet businesses for sale, and every other kind imaginable. For example, gas stations, restaurants, hotels, bars, laundromats, and online business all have their own unique buyers seeking these specific business opportunities. A restaurant buyer will have very different acquisition criteria than the buyer of an internet business. For example, there are literally dozens of restaurants for sale in Las Vegas at any given time. How do you differentiate your restaurant for sale to appeal to the largest number of restaurant buyers? A gas station buyer or convenience store buyer has very different acquisition criteria than the buyer of a local liquor store for sale. We have the skills to present your business in the most favorable light to every kind of business buyer. A buyer who searches for "Las Vegas businesses for sale" will find literally hundreds of businesses for sale at any given time. We know how to make your business stand out from the crowd and attract the attention of qualified business buyers.
“Why should I invest time and money to formalize an exit strategy if I have no intention of selling my business in the foreseeable future?"
In our 23 years of experience, many of our clients have been forced to sell a business due to unforeseen personal events in their lives. These can include illness, lack of family interest in the business, divorce, and even external financial crises completely unrelated to the business. And not all of these events are negative: a new business opportunity which can’t be delayed can trigger a sale to raise capital. If you are forced to sell your Las Vegas business suddenly-and without a formal exit strategy it could easily cost you hundreds of thousands or even millions of dollars. This is why a formal exit strategy is critically important. As a business owner, you should take measures today to insure your business is prepared for a sale if the unexpected does occur. A carefully prepared exit strategy is a kind of insurance policy against unforeseen events.
"What should I do to make sure I am prepared to sell my business?"
See below a list (your business might require different/additional items so feel free to contact us and we can discuss your specific needs):
- Financial Statements. Your financial statements (for at least 3 years) must be accurate and up-to-date. Make sure that appropriate GAAP accounting practices are used every year and that all assets and liabilities listed on the balance sheet are accurate.
- Liquidate obsolete inventory. Consider selling any unused, inoperable or obsolete equipment. If you have no use for the equipment the buyer probably won't either. Some business owners will retain old, obsolete, or unsalable inventory because they think it doesn't cost them anything and someday a buyer may want it. Old inventory may not have a direct cost to store it in a warehouse but if you think there is that 'special buyer' somewhere who will pay for it you are likely mistaken. If needed, hire an inventory auditor/appraiser to get an accurate value of your inventory, then sell as much obsolete inventory as possible.
- Make sure your employment practices are documented and properly applied. Is overtime being paid correctly? Are required break periods being observed? You don't want an employee complaint to trigger an unwanted audit by the state labor commission. Are your W-2 employees and 1099 independent contractors being classified properly? Do the employees of your business have proper immigration status? Have your employees been screened properly for their jobs (i.e. if you own a daycare/nursery have you performed a background and drug test?). These are all liability issues to be considered.
- Make sure your expenses are all legitimate business expenses.
- Clean up any old partnership or stockholder disputes.
- Make sure all state and federal tax payments are current. Sales tax, FICA, etc.
- Have a professional business valuation or business appraisal performed for your business so you can determine if the value of your business is adequate to provide the cash needed to reach your financial goals.
- Consider the corporate structure of your business and determine what tax issues will need to be addressed to maximize your after-tax cash proceeds. Are you a ‘C’ Corp? If so, speak to your accountant to see if changing to an ‘S’ Corp would benefit you. Or the same with an LLC.
These items are just a few of the things you should be doing today in order to receive the maximum value for your business when the time comes to sell.
Implementing these measures will increase the value of your business and lower the risk for a new owner. And if you can lower the risk to the buyer of the business you will achieve a higher sale price when you sell your business.