3 Tips for Selling a Small Business in Connecticut
March 23, 2020
Deciding to sell your business is not an easy decision to make, since it has likely been integral to your livelihood. You have probably put a tremendous amount of your own money, time, and energy into growing your business, and parting with it may be challenging. When selling a business, whether big or small, it is essential that you avoid mistakes that can reduce the profit you obtain from the sale and cause major financial and legal headaches. Rushing a sale or selling without fully investigating your options may cause you to miss out on better opportunities. However, waiting too long to sell can also spell disaster. Whatever your reasons for selling, it is important to discuss your plans with an experienced business law attorney so that you can receive accurate legal guidance personalized to your unique needs.
Start Preparing Sooner Rather than Later
Experts suggest that business owners should start preparing for a business sale at least several years before planning to close the deal. This gives you time to ensure that selling is truly what you want and avoid the dreaded feeling of “seller’s remorse.” Preparing well in advance also allows you to gather the financial data a conscientious buyer will want to evaluate. Typically, buyers want to look at up to five years’ worth of tax returns, profit and loss statements, bank statements, supplier and vendor contracts, and other relevant documentation.
Avoid Undervaluing or Overvaluing Your Business
If you have poured your heart and soul into your company, it is understandable that you may put a very high value on the business. However, setting a price that is unrealistic can be a massive waste of time and energy that leads nowhere. On the other hand, undervaluing the business can result in lost profits that you will never get back. In order to properly price your business, research the value of similar businesses, consider the market and overall health of the economy, and remain objective regarding its worth.
Do Not Sell to The Wrong Person
Depending on your unique situation, you may be desperate to find a successor and sell your business quickly. However, this does not necessarily mean that you should take the first offer that is presented to you. Your company is a part of your legacy, and you want to ensure that the person you sell it to has what it takes to keep the business running successfully. If the new owner lacks leadership skills, is inexperienced, or has a closed mind, it could be disastrous for the future of the business.
Contact a Stamford, CT Business Acquisition Lawyer
If you are a business owner who is thinking of selling your company, it is crucial that you have legal representation during the process. The Law Offices of Peter V. Lathouris, LLC are equipped to help with many aspects of the business sale process, including locating a buyer, assigning a value to the business, negotiating the sale, drafting the purchase contract, and other important legal documents. Schedule a free, confidential consultation with an accomplished Norwalk business law attorney from our firm by calling us today.