Share

Rhode Island Legal Blog

Monday, November 26, 2018

Considerations When Selling Your Business

Finding yourself in a position to sell your business is a monumental achievement. Establishing a business is hard work, and preparing to sell your business is no different. There are many reasons to sell your business: you may be looking to retire, take a less involved role, resolve an ownership dispute, or perhaps your business is now struggling and you are looking for a buyer to try to turn it around. Regardless of the reason that you’re selling, there are some key considerations that you need to be aware of.

Establishing a Strong Team

Selling a small business has many moving parts that will be discussed further below. As a result, it is essential that you establish a strong team to help you through the sale. The three team members that you will want to identify early on are an attorney well-versed in the sale of a company, an appraiser who can accurately value the business, and potentially a broker who will work hard to identify potential buyers. Your choice on these team members, and whether to include all three, will depend upon the complexity of the business and its potential valuation.

Timing

Timing the sale of your business is crucial, as is identifying that you intend to sell the business well in advance. Ideally, you will want to have identified an intent to sell two years prior to the anticipated sale date. By beginning the process two years ahead, you can ensure that you’ve established a strong team that you trust that will help you through the process. Additionally, there is tremendous due diligence that will need to be completed to value the business and ensure all legalities are sorted.

However, while planning two years in advance is ideal, it isn’t always possible. When an unforeseen event occurs that forces you to sell the business sooner than anticipated, you will still follow the same process but will do so on a more compressed timeline.

Valuing the Business

Your business appraiser should work diligently with you to ensure that the business is accurately valued. To value the business, the appraiser will analyze market conditions, the business’ operating history, and the business’ future potential. Ultimately, the appraiser will present a formal valuation of the business that can then be utilized when pricing the business for sale.

Using a Broker or Selling Yourself

A final consideration when selling your business is whether you want to sell the business yourself or go through a broker. The decision to use a broker should depend on a number of factors including your availability, who you intend to sell to, and the timeline for which you need to sell. If you’re selling to someone you know, then a broker will likely not be necessary as a knowledgeable business attorney will be able to handle the sale. However, if you’re selling on the open market, then a broker may be ideal as he or she is highly experienced in selling small businesses and will know how to command the highest price in the shortest time possible.


Archived Posts

2019
2018
December
November
October
September
August
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
2013
2012


The Law Offices of Richard Palumbo, LLC assists clients with Real Estate Law, Business Law, Probate, Evictions for Landlords and Property Damage matters in Rhode Island including Cranston, Warwick, Coventry, Johnston, Providence, Pawtucket, Central Falls and all areas throughout RI.



© 2019 Law Offices of Richard Palumbo, LLC | Disclaimer
535 Atwood Avenue, Suite 4, Cranston, RI 02920
| Phone: 401.490.0994

Business Disputes Litigation | Business Law | Civil Litigation | Commercial Real Estate | Condominium Law | Construction Litigation | Estate Litigation | Evictions | Mortgage Foreclosures | Purchase/Sale of a Business | Commercial Real Estate | Probate & Estate Administration | Product Liability | Property Damage & Insurance Law | Real Estate Law | Real Estate Litigation | Residential Real Estate | REO Services | | Resources

Attorney Website Design by
Zola Creative