The decision to sell your business isn’t always an easy one. There are several key factors involved, including legal, human resources, intellectual property, and financial. Here are five considerations that you should take before selling your business.

The Process Can Take a While

It’s important to understand that selling your business can take a while. It’s not uncommon for the process to take 4 to 6 months. If you want to get the sale completed faster, there are a few things that you can do early on, such as:

• Drafting a disclosure schedule.
• Gathering key information in an online data room.
• Preparing management presentations

The Buyer Will Do a Bit of Digging

The buyer is likely to do a bit of digging before completing the sale. Significant due diligence allows the buyer to understand exactly what he or she is buying and what obligations will be assumed. Having your books, records, and contracts in order can be helpful.

In addition to due diligence, the buyer may want to thoroughly review your financial statements and projections. A representation will help the buyer to better understand where you sit financially and if the purchase is worth it.

Competition Can Be Beneficial

Multiple bids for your business can be quite beneficial. Competition can help you to get a much better deal. Keep in mind that you don’t necessarily have to have multiple serious bidders. Giving off the impression that there are several interested parties that can boost negotiations.

You Should Hire Some Help

For a successful sale, some help is required. A lawyer and legal team can be invaluable during the process. You should also consider hiring an investment banker, who can assist in designing an optimal sale process, coordinating responses to due diligence, preparing confidentiality agreements, and assisting with negotiations. The right team can help to make the sale of your business successful.

Avoid Getting Stuck in the Letter of Intent Stage

A non-binding letter of intent with insufficient details about the sale can be detrimental to your sale. You have the greatest leverage for bargaining before the letter is signed. With the assistance of your team, negotiate the terms as if it were a binding document.

You should also make sure to create a well-drafted acquisition agreement that can provide you with vital protection. It may be beneficial to have your counsel draw up the first draft.

When selling your business, there are several things that you need to consider. During the process, compromises will need to be made by both parties. Remain courteous and calm throughout negotiations to avoid conflict and ensure a smooth process.