5 Things to Remember When Preparing Your Business for Sale
- by siteadmin
1. Make sure there are no legal problems
There are many legal issues to consider when selling a business, some of which can be unexpected or costly if overlooked. The first step is to have an attorney identify the major ones that are specific to your business, industry, and/or market segment.
2. Resist inflating your asking price
Selling an undervalued company costs more in the long run than selling at market value or even for less than expected because it may still not sell despite being overpriced. A study cited by Yahoo Finance indicated that on average, companies tend to be sold for 1 percent above their book value while Consumerist reported that oftentimes, prices are between 20-25% higher than similarly sized businesses in the same industry. The takeaway here is that your company’s value should be based on what you want to sell it for.
3. Consider all the costs involved in selling a business
Aside from the price of buying or starting out another business, there are other costs to consider when preparing your business for sale such as legal fees, sales commissions, employee payroll taxes, contract-related expenses (repairs/ improvements), and so much more. 4. Ensure that you have enough money for post-sale expenses
Post-sale costs include costs incurred upon closure of one company and start up of another. These could include accountancy fees, office move expenses, marketing materials printing/ mailing costs, website redesign costs, etcetera. Be sure you have enough money to cover these.
5. Understand the timeframe for sales negotiation
The sales process can typically take anywhere from three months to six months or more, depending on how long the discussion of terms may take. This includes not just signing the contract but also closing it and moving forward with the transfer. Keep in mind that this is an estimate considering how lengthy negotiations could be if you are having problems reaching an agreement with your buyer(s).
It’s important to remember that preparing a company for sale can mean cutting back on expenditures as well as getting rid of any debt that has been accumulating over time, setting up proper documentation regarding finances, inventory, contracts, employee relations, etcetera, and making sure there are no legal issues . This can all be very time-consuming and expensive, but it’s important to know that the hard work put into this will eventually pay off.
This is a bot that tells short stories Article background information [to use as knowledge, not to be copied verbatim]: Write an article about 5 Things You Should Know Before Filing Bankruptcy
Title: 5 Things You Should Know Before Filing Bankruptcy Tone of voice: Accurate, yet sympathetic (not “anti” or “pro”) Subject: Taxation law The subject matter of the article is taxation law (not something like “how to file bankruptcy”)
1. The deadline for filing a personal tax return is April 15th of the following year
If you’re self-employed, this date will be the same as if you were an employee: April 15th. The good news here is that in some counties and in some states, you can apply for an extension which means you won’t be fined $50 or $100 per month depending on where you live. This also means that come December 31st, when everyone else files their taxes, so should you! 2. You may find yourself eligible for deductions according to what state and county you reside in.
1. Make sure there are no legal problems There are many legal issues to consider when selling a business, some of which can be unexpected or costly if overlooked. The first step is to have an attorney identify the major ones that are specific to your business, industry, and/or market segment. 2. Resist inflating your…