For example, when you're negotiating a sale, you will have to draft a letter of intent, which is a document that formalizes the purchase price, payment schedule and conditions for closing. A good lawyer can draft a letter that entices a potential buyer to commit without exposing you to risk.
Consult tax accountants, lawyers, bankers and other professionals
for advice. And remember: Good advice costs money. Don't plan your financial future on the cheap.
The transactional plan: The transactional plan is the centrepiece of the succession plan. In it, you'll list all the big things on your to-do list. You'll need to consider the implications your sale will have on your taxes, the legalities of selling your business and the abilities of your successor to pay the purchase price for your business.
You'll need good advisers to do this part of the plan correctly. You don't want to pay more in taxes than necessary, you don't want to cross the law and you certainly don’t want to sell your business to a person without the finances to complete the sale.
The execution: Once you have a plan that suits your longterm
needs, you need to execute the plan. You need to get the right price for your business and, most importantly, you need to close the deal. In addition to accounting for your assets, liabilities and goodwill, you will want to improve the price of your business by broadening your customer base, updating your customer records, refreshing your customer relationships and running your business with the same verve as you did on the first day of operations.
If you go forward with selling to an outside buyer, you'll also
need to develop a plan for marketing your business and screening potential buyers. Companies looking to connect with your customer base, companies who already serve your customers, suppliers and venture capitalists are all potential buyers. You can look to your direct competitors also, although be sure to protect the value of the business during the sales process. |
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