Today I am going to be talking to you about selling your business. Do you have the right people on your team when you are selling your business? You may think that you can "wing it" on your own when you are ready to sell your business. After all, you have run it successfully so far. But selling your business is different than running your business. In this video, I describe the team you should have in place when you are ready to exit, so you get the most from what you have worked so hard to build.

Article - Selling a Business

Today I am going to be talking to you about selling your business. Do you have the right people on your team when you are selling your business? You may think that you can "wing it" on your own when you are ready to sell your business. After all, you have run it successfully so far. But selling your business is different than running your business. In this video, I describe the team you should have in place when you are ready to exit, so you get the most from what you have worked so hard to build.

I implore you to seek counsel from your advisers when considering a decision like selling your business. The typical advisers who would be involved in a transaction like that would be your attorney, banker,  financial adviser, and CPA.

1. Attorney: your attorney is going to be able to tell you what you can legally do, what the purchase documents should look like, how you can structure the finances, etc. There are all kinds of things you are going to need an attorney to discuss; for example, they will  help to make sure that the way you are selling your small business is in compliance with the law and that the sale is going to be favorable to you. There are many potential pitfalls when selling your business and your attorney is going to help you identify what those are; for instance, you need to make sure that you can actually sell the things that that you are offering for sale: do you have financing, do you have financing with the SBA, do you have financing with a lender who may have a lien against certain business assets, can you even sell what you are trying to sell, are there any environmental concerns, I could go on and on, there are tons of questions that an attorney is going to be able to help you with.
2. Banker: You are going to need to know how to financially structure this transaction. Furthermore, when the cash comes in, you will need to know what to do and where the money should go. In addition, a lot of times when you are selling a business, you have to change certain elements about the business. Your banker will need to be privy to certain details related to your business so that they can advise you on the best way to structure your accounts and the best way to accept funds.
3. Financial Adviser: You are also going to need a good financial adviser in place.  A lot of us in this day and age have online accounts through Scottrade and TD Ameritrade and there is nothing wrong with those companies, but with those online companies you will not have the level of advice you are going to need when you have a large sum of money coming into your possession. A good financial adviser can help you take that sum of money, talk to you about what your risk tolerances are, what your long-term goals are, and they can come up with an investment plan that is designed to meet those objectives. I do not recommend going that part alone no matter how much success you have had in the past in the market. I implore you to bring a good financial adviser on board to help you manage that money after the sale.
4. CPA: You need a good CPA on your side! First of all what are you selling? Are you selling the assets of the business, are you selling the stock of the business? Both have very different tax consequences. Secondly, are you going to receive a lump sum of money up front, are you going to take payments over a short time-frame (less than three years), or maybe you are going be the bank and you are going carry a note for an extended period of time to finance the buyer. Much like a traditional mortgage, every one of those options has a different tax implication. Right now we have a seven year window under the new tax law where we know with a high degree of certainty what the tax laws are going to look like. Things are going to change from year to year but we know what the tax rates are going to be and we know what we can and cannot do right now. All the more reason why you need a CPA breaking down those different options for you.

As you can see, you need these four people on your team to make this transaction a success. You are taking your life's work and you are selling it to another person and without these four team members who knows what is going happen. Not to mention you may come across a very savvy buyer who has his or her team in place and who may have all the facts, all the circumstances, all the scenarios, and when they come to the negotiating table they are going be in a higher position of negotiating power because they have the facts. But if you have your own team in place you could circumvent this type of scenario. 

Therefore, I highly recommend that you get the facts as well as a strong team in place before you try and sell your business.

If you have any questions, comments, or ideas for future videos, please let us know.