Selling Your Business

How to Negotiate Your Best Deal

Selling your business is a time-consuming, emotionally-draining experience. But you owe it to yourself, your family, and your heirs to invest the energy and time to do it right. The same careful approach described in this Manual should be used if you're buying or investing in a business.

This Manual answers the following questions:

  • What is a justifiable price?
  • When should I sell the business?
  • How do I "window dress" the company to maximize its value and selling price?
  • How do I structure the sale for the most after-tax money?
  • When and how should I collect the money: all cash at closing, an installment payout, part contingency sale, stock exchange, or a combination?
  • What assets should I value and sell separately, e.g., a real estate affiliate owned by me and my family?
  • How do I make sure I get all the money due me?
  • What are my benefits and obligations after the company is sold and how much will I be paid for after-the-sale obligations, such as continued employment, consulting, a noncompete agreement, etc.?

And the many details: What actions can I take if the buyer defaults on the payments due me?... Whose state's law will settle legal disputes: the buyer's or my company's?... What about buyer-guarantees and collateral for installment notes?... Have I escrowed the shares being sold?... Who is responsible for future liabilities stemming from past events or actions, such as product liability lawsuits on products produced while I owned the company?

While these questions may seem insignificant in relation to the overall purchase price, they can loom large during the final stages of negotiation...and in the future after the deal is closed.

This Manual contains five case studies on how other owners cashed in and valued the sale/purchase price. Also included: A comprehensive glossary of 127 valuation and financial concepts and terms to use today and save for future reference, and a section on how a potential buyer looks at and analyzes a business, using a checklist of 106 questions arranged by category (marketing, financial, etc.).

Be sure you understand completely and precisely all the ingredients and conditions of the total price, as well as the many tax, risk, and business implications. You don't want the final deal haunting you in future years because you missed out on some unrecognized opportunity or fell into some of the hidden pitfalls.

You want to walk away from the sale of your business knowing that you received the best possible price, incurred the minimum tax liability, assumed no liabilities going forward, and received sufficient money for you and your spouse to retire comfortably. You want a full, final, and unquestionable closing.