Running a business is a major commitment. Business owners often spend massive amounts of time, energy and financial resources on the operation of their business, so it may not be that surprising when an owner makes the decision to sell a company.
That being said, there are countless things a person will want to consider before agreeing to sell (or exit) a business. And while every situation and every business is different, there are at least a few elements regarding legal planning that every business owner should consider when he or she is thinking about selling.
- Why are you selling? Your motivations to leave a business can influence everything from who you sell to and how much you sell for. Think carefully about your reasons, because reasons like panic or desperation could lead to unwise, impulsive decisions.
- What is your exit plan? As an article from NFIB notes, preparing an exit strategy is crucial to making the transition easier, whether you sell the company to someone outside the company or leave it in the hands of a co-owner. Think about how you might prepare your employees, your customers and your partners for your exit.
- Are your contracts in order? Financial documents including contracts must be examined thoroughly prior to a sale and will typically be part of the purchase agreement. Make sure you collect and organize all this paperwork to ensure your bases — and relationships — are covered.
Of course, there are numerous other questions Nashville business owners should be prepared to answer before selling (or otherwise leaving) a business, but these three can give readers an idea of where to begin. Once you start thinking about this, discussing your situation in more detail with an attorney can help you take the steps you need to take to ensure the transaction goes smoothly.