Let's say you're an entrepreneur who has started and built your own business, or maybe you’ve inherited a business. Perhaps the business is booming, and competitors are interested in acquiring it. Or perhaps you’ve decided it’s time to retire, or simply to move on to other ventures. If you’ve decided to sell your business, there are many legal, financial, and practical aspects to be considered. What exactly are you selling? How can you be sure, once you get an offer, that you are getting the full value for your business? How will you be paid, and will you be financing the deal?
We can help you with selling your business and advise you on how to proceed. You’ve worked hard to build an enterprise, and likely invested a significant portion of your life and significant personal resources. Make sure you receive the full value of what your business is worth. We are based in Gig Harbor but we represent throughout Washington and Idaho.
Before you start the process of selling your business, it’s important to have experienced legal eyes review your current situation. Selling your business without sufficient attention to certain details could leave you on the hook for significant liability should anything go wrong in the transfer or if anything goes wrong for the buyer in the future. For instance, it’s important to carefully review your contracts. You likely have many contracts with vendors, clients, and employees. The contracts may have clauses that negate or change the terms of the contract in the event of any change in ownership. Some contracts may even be written as an agreement between you and the other party, instead of between the other party and the business.
A smart buyer will engage in due diligence before purchasing your business. It’s very important to have your ducks in a row. If you start a sale only to have the buyer pull out because they discovered something negative in the due diligence process, not only have you lost critical time and wasted effort, but you could wind up with a bad reputation that could hurt opportunities for other sales.
Your business likely consists of many elements in addition to the legal entity - the LLC, corporation, partnership, or other legal structure. There’s the intellectual property - your brand. There’s the equipment and inventory. There’s the real estate. There’s the list of clients and customers that make up how revenue comes in.
When you’re selling your business, it’s very important to understand what exactly you are selling. You may intend to sell only the legal entity and the intellectual property, but your buyer may be expecting much more. You could be expecting to retain significant control of the business after the sale, while the buyer is expecting you to go. Any misunderstanding could lead to lawsuits and expensive litigation.
One way to clear this up in advance is a well-drafted letter of intent (LOI). A LOI that fully covers your bases can make sure that every element is clear between the seller and the buyer. We can understand your goals and desires in selling your business, and help draft a letter of intent that correctly conveys those wishes.
With the many assets and elements that make up your business, it can be difficult to ascertain a price that truly reflects the value of your company. We can assist you in discovering the true value of your business. A person may offer an amount for your business, but that offer can mean different things. For instance, how will this person pay you? Many deals for businesses are not in cash. Will you be financing a portion of the deal? If so, what kind of control will you have over the company, and what kind of liability will you be on the hook for? We will make sure the right questions are asked, and we can help you fully understand the ramifications of the many decisions you will have to make.
When selling your business, it’s critical to be prepared, and, once the process begins, to fully understand the consequences, both positive and negative, for every choice you make. We can advise you through the sale of your company. To schedule a consultation, call us at 253.858.5434 today.