When you receive an offer for your business, you’ve achieved a significant milestone. You can take a moment to savor it, and then the real work begins. When a seller gets a written offer, they have three options: accept it as is (price, terms, and other clauses), reject it (usually if there is another, better offer in play), or negotiate the price and terms with a counteroffer.
Most owners have never sold a company before, and the structure of a deal can be complex. An experienced broker will help facilitate the negotiations. The stakes can be high, especially if the sale is funding your retirement.

Step one: Review the terms and decide if they work for you. Your broker can help you understand the details, the payment structure, the contingencies, and the closing timeline. Before listing, you’ve already met with your accountant to determine any tax implications from a sale. They’ll be able to advise you on whether the terms are customary and fair, and help you make a counteroffer or negotiate if needed.

Once the seller and buyer sign off on the offer, a 21-day due diligence period begins. This is the buyer’s opportunity to investigate the company’s financial position and validate the financials. We create a secure Dropbox folder where the seller can upload the documents a buyer has requested: tax returns, P&L statements, balance sheets, information on payroll, workers’ comp, insurance, and perhaps, information on Accounts Receivable, such as aging reports. Having a central location for the documents saves time and back-and-forth communication between the parties; it also makes it easy for the broker to access, decipher, and track documents.
Your job is to keep your foot on the gas and manage your company; your broker’s job is to serve as project manager for the deal. Your broker will keep communication flowing and ensure the milestones and timeline remain on track. They might schedule regular meetings or calls to check in on the to-dos and outstanding requests for information.

Meanwhile, your task is to make sure your company stays healthy and profitable. Any decline in revenues could hurt, perhaps even kill the deal. Lenders will need to make sure the company’s value meets the requested funding amount, for example. Every dollar decline in profitability could cost you $3-4, because the multiples will be based on your profitability.
This is not the time to make big changes in the business; changes in pricing, vendor agreements or key staffing, and major equipment purchases should all be on hold. Ensure your marketing and sales systems are operating at full throttle, so sales remain steady (or increase.)

Don’t assume the deal is done until the closing papers are signed and all funds are wired. It’s important to maintain confidentiality about the sale until closing; you’ll want to avoid distracting your staff, causing your clients or prospects to worry about the company’s future, or giving your competitors an unfair market advantage.

Selling your company while running it can be time-consuming and challenging, but your broker’s experience will help alleviate much of the stress and complexity. Finally, you’ll reach the closing and be able to move on to the life you’ve been planning and looking forward to for years.

I can help you understand the value of your company and how long it might take to sell it, click here for a complimentary and confidential opinion of value.