As experts in selling equity and strategic partnerships, our team has spent years helping businesses make important investment decisions. Selling a business can be as easy or hard as it needs to be to negotiate the best deal possible. However, there are specific points to consider before selling a business to a competitor to make the transaction as smooth and profitable as possible.
Due Diligence Is Paramount
When contemplating a business sale, due diligence is a first formality in which each party determines the others ability to deliver on what is promised. This process can require a considerable amount of work, time, and effort from a party’s legal team; however, it must not be expedited, as it’s a crucial start to any successful deal.
Due diligence helps to prove both the buyer’s’ ability to perform and the selle’s disclosure obligations. It helps to structure deals that are fair to both parties and to ensure that both parties are competent when it comes to finalizing complex contracts and releasing funds.
Know Who You Are Working With
Work with reputable mergers and acquisitions advisors as they can offer expert guidance to business owners.
Larger companies are less likely to try and cheat or falsify information when it comes to selling a business. People risk losing their jobs if they break the rules, and larger companies have reputations to consider when it comes to foul play. However, smaller companies have fewer risks if they decide to try and cheat the system. Will they copy your information? It’s best to have a solid NDA in place before disclosing anything to anyone when putting your business up for sale.
Know Your Businesses Value and Keep Control of Emotions
Once you have decided that you are serious about selling your business, get the business appraised. You’ll be encouraged to offer a selling price as soon as your business goes on the market, and an appraisal will help you to set this price based on the state of the current market.
When leaving a business, competitors can act as close allies even if you don’t see them like that at present. For that reason, try not to let rivalry, distrust, and competition interfere with your opportunity to close a deal.
For more information and guidance on strategic partnerships and selling equity, contact us today.