Here’s a transcript of the video, “5 Steps Towards Preparing Your Business For Sale.“
Hello Andrew Weaver, welcome to LawyerFair bitesize videos. Today we look at five legal steps towards preparing your business for sale.
There are two scenarios that are likely to emerge if you fail to prepare. The first and most likely is it will affect directly the value and sale price. Second most brutal is it could actually make you lose the deal.
First Steps Towards Preparing Your Business For Sale
for Here we are, step one, get experienced M&A Advisors on board early. Don’t assume that the firm you’ve always used or the lawyer that’s been recommended is experienced in M&A as a specialist area. Find out if they’ve sold businesses of a similar size and ideally in a similar sector and if they haven’t, find a new one.
Step Two, Due Diligence
It’s a process that normally emerges after heads of terms have been agreed, when a buyer gets under the bonnet of your business for sale. Why not do it yourselves upfront, clean out any problems yourselves before they emerge and hand over a nice shiny DD document to a very happy buyer.
Step Three Is Consent
Get it early from shareholders and other third parties. Most importantly from land lords. For him there is often nothing in it for them with regards a business transfer and therefore you don’t want to be held to ransom late in the process.
Step Four Is Contracts
Make sure they are up to date. Ideally, get the extended. Again get consent. Many entrepreneur build up businesses based on very loss or even gentleman agreements. They weren’t transferred quite so smoothly.
Step Five Is Clean Out Any Skeletons In The Cupboard
Disputes, litigation, and make sure that key employees are tied into the business. If you do all these things, you’ve go a very good chance of getting the suitable reward for all the hard work you’ve put into your business over the years.
Thanks for watching LawyerFair bitesize videos. See you next time.
Final Words On Preparing Your Business For Sale
Selling a business isn’t easy and there is no guarantee that you’ll ever be able to sell your business. However, preparing your business for sale will be much easier by following the five steps we’ve just outlined.
If you need any legal advice about anything we have just discussed then book a free Startup Legal Session today.