The worst mistake of a business seller in Florida is not to have a solid exit strategy. Planning an exit strategy will ensure you get the best value for your business and prevent unforeseen situations that may force you to sell for a lower price.
In this article, you will find out a strategic overview of the steps involved in Florida’s business sale process.
Florida Business Sale Process – Taking a Closer Look
Identifying the Seller’s Goals
Trying to sell a business without a set goal is similar to walking into an unknown landscape without a map. Consult with an experienced business sales attorney to assess the reasons behind the sale, the seller’s goals, and the transaction’s financial impact.
Performing an Accurate Business Valuation
Many entrepreneurs fail when valuing a business due to a lack of pragmatism. Regardless of how good a company may look in the owner’s eyes, it may not look this way for prospective buyers.
Expert legal guidance is essential to guarantee a proper business valuation focused on real-world numbers and statistics.
Selecting the Best Business Opportunities
Work with an experienced attorney to identify prospective buyers that are financially qualified to buy the company. Depending on the negotiation process, you may require buyers to sign a confidentiality agreement and provide financial background information.
When reviewing the buyer’s information, you must find out:
- The buyer’s availability of investment funds
- Whether the buyer will finance the purchase
- The buyer’s sources of financing
- Whether the payment will occur in full or in installments
- Any current or past judgments or bankruptcies filed against the company
- Is the prospective buyer able to run the business?
- Does the prospective buyer have the required skills and business experience?
- Does the buyer have a reasonable timeframe?
Organizing the Company
After issuing a Letter of Intent (LOI) with a preliminary commitment to purchase the business, the buyer may proceed with due diligence to verify the accuracy of the information provided by your company.
This process may require the disclosure of several business documents, such as profit and loss statements, balance sheets, tax returns, sales records, debt disclosures, and existing business contracts.
Handling the Business Exit Process
If you want to sell a business, you want to sell a growing profitable company. Hence, one cannot expect to make a profitable deal by selling a business overnight. The ideal approach is to plan a business exit at least a year in advance.
This strategic period will permit you to make the necessary adjustments and ensure a solid transition in ownership. Some of the steps involved in this process include:
- Improving sales to boost business appreciation
- Organizing the financial records
- Preparing the customer base
- Handling any necessary updates
- Anticipating potential issues that may deplete the value of the business
Closing the Transaction
In this stage, an experienced attorney is essential to conduct the process. Both parties involved in the purchase agreement must understand the document’s terms and the implications of the transfer in ownership.
It is crucial to identify the tax impact of different exit strategies, diligently working with your attorney to mitigate it as much as possible.
In addition to the purchase agreement, the closing process involves several documents. Make sure to have them written and reviewed by your legal advisor to ensure full legal compliance and avoid unforeseen issues in the post-sale stage.