If you are considering selling your business, it is important that you understand the impact that your decision will have on you and your family, as well as other constituents of your business, such as your employees, suppliers, customers and the community. In order to ensure the best outcome for you and your business, ask yourself the following questions before you embark on a sale process:

What Do You Hope to Get Out of the Sale of Your Business?

Articulate your personal and financial goals for the sale of your business:

  • How will the sale promote your long-term vision for the business and your family legacy?
  • How much do you expect your business to sell for?
  • What are your personal spending needs, now and for the rest of your life?

Understand the deal terms that are most important to you:

  • What are some of the characteristics of an ideal buyer for your business?
  • How much of the business do you want to sell — all of it, or a non-controlling interest?
  • Would you be willing to accept a portion of the transaction proceeds in shares?
  • Would you be willing to defer a portion of the transaction proceeds or agree to an "earn-out," in which you receive payment after the business reaches certain performance or earnings milestones after the sale?
  • Have you explored any alternatives to an outright sale, such as an employee stock ownership plan (ESOP) or minority investment?

Are You Prepared to Sell Your Business, and Is Your Business Prepared to Sell?

Discuss the transaction with your family and management team, as appropriate:

  • How and when will you include your family in your decision-making process?
  • How will the sale impact family members who work for or have an ownership stake in the company?
  • Whose approval will you need to obtain before selling your business, and do you expect any stakeholders to challenge your decision?

Make sure you have taken the appropriate steps to prepare your business for sale:

  • Have you conducted a detailed "due diligence" review of your business, including identifying key value drivers and any potential red flags?
  • Is your management team prepared to handle the work involved in coordinating the sale process alongside their day-to-day responsibilities?
  • Have you engaged any advisors, such as an investment bank?

What is the Best Outcome for Your Business, Employees and Other Constituents?

Your employees and other important constituents are critical to the long-term success of your company. Be sure to keep them in mind when devising your sale plan:

  • What impact will the transaction have on your employees?
  • How and when will you communicate the transaction to your employees and other constituents?
  • What sort of succession plan is in place for you and your senior management team?
  • Will key employees be incentivized to carry the business through the transaction and continue working for the new owners post-sale?
  • Will the transition result in disruptions for your company's suppliers or customers?

What Do You Intend to Do After the Sale?

Set goals and expectations for your life after the sale:

  • Do you want to participate in your business after the sale? If so, how and for how long?
  • If not, how will you spend your time after the sale — pursuing hobbies, doing charitable work or starting another business?
  • What do you plan to do with the proceeds from the sale?
  • Are you and your family prepared for a new financial reality?
  • Have you explored various wealth-transfer strategies to minimize the tax impact of the transaction?
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