Selling a small business can be tricky and more than a little stressful. Make sure to protect your interests by documenting the details of any negotiations with potential buyers of your small business. Before you get your small business ready to sell, here are a few topics that you may want to consider.
What exactly is included in selling a small business? Business name, equipment, current inventory, other inventory not at that location, customer lists, trade secrets, ongoing training by you to help the new owner get set up, contacts for all supplier accounts are all topics to consider when selling a small business.
If you don't own the building, what requirement will the leasing company have for the new buyer? Contact the leasing company to determine what documentation they will need from the purchaser of your business. You may even want to have the purchaser contact the leasing company prior to drawing up a business sale agreement. You don't want to get through the entire negotiation process only to find out that the leasing company will not allow the purchaser to rent the space your small business occupies.
Which obligations, financial and otherwise, will the new buyer be assuming and which are your responsibility as the seller? Depending on how the small business is set up and what is being sold as part of the business, some obligations you may need to take care of and some the new owner may assume. Be specific about these financial obligations in the business sale contract.
If there will be a payment plan, specify in writing and in detail the payment schedule and duration of payment plan you negotiate with the new buyer. Buyers and sellers may have different opinions on what was discussed during the negotiations of the sale of the business. It's better to have every detail specified so there are no questions later.
Determine any restrictions on new business ventures you, the business seller, can start. Some business sale contracts specify that an owner selling a business may not start a new business in the same industry within a certain radius of the existing business for a specified period of time. Discuss this with the purchaser of the business. Even if you have no intention at this point of starting a new business, address it in the business sale contract to protect both yourself and the purchaser.
Will your employees be willing to work for the new owner of the business? Talk to your employees prior to any negotiations regarding the sale of the business. Let them know what your business plans are so they can consider their options. When negotiations are under way with a potential purchaser of the business, you can advise them of the current employees' intentions so that they can adjust their plans accordingly.