Are you considering selling your business? Well, then you are about to take one of the most crucial decisions of your life. Selling a company off and generating enough value in the process is as difficult a task as building up one brick by brick. Many people commit the mistake of directly negotiating with the buyers without analyzing what they are looking for. Buyers are of different types and so are their requirements. Also, there is no denying that there are chances of people bluffing you and compelling you to strike a bad deal. However, all these are not supposed to get you scared but only make you understand the importance of planning before selling a business in California. So, let’s go about discussing some essential considerations.
- Get hold of the right professionals– Selling a company involves a lot of legal and accounts related matters. With experts in the respective fields by your side, the entire procedure becomes smooth. First things first, consult a tax planning and an estate planning professional. Make them understand your plan and ask them to review your tax conditions and estate plans. A tax planner will introduce you to a number of tools that enable tax mitigation. The use and application of these tools will turn complex as you progress more towards the final sale. So, it is best to entrust the responsibility to a specialist and relieve yourself from an extra dose of anxiety.
- Sort out the company finances– As with the buyers of any other products and services out there, those who propose to buy your company will be equally apprehensive. And the most important thing to them will be the company finances. If your finances have so far been managed by a reliable team of accountants, you are good to go. On the other hand, if you have been dependent on Quickbooks, it is time you upgrade. The secret to maximizing the price of your company is by telling your buyers a potential story they believe. Most buyers negotiate in terms of Generally Accepted Accounting Principles, popularly known as GAAP. Make sure your company finances abide by these set standards. As an extra measure, get a review or audit done for the last 2 years atleast. Basically, the idea is to keep nothing that raises a question ahead of the sale.
- Delegate functions to different roles– If you are up for selling a small business in California, you have got something additional to bear in mind. Often in small businesses, a single person heads the organization and solely performs the managerial functions too. While this is fine for you, it is not for the buyers. In the absence of positions and roles like CEO, Sales Manager, VP, Accountant and so on, the company seems to lack sustainability. It appears to the buyer that the company will become stagnant without that one person who drives the entire organization. Consequently, the price you get will be lesser than what is desirable. So, even before you start with the initial process of selling your company, define roles and people that define a well-organized business.