For business owners, deciding to sell a business presents some unique challenges with which an experienced business attorney can provide critical assistance. If you are considering selling your business, read on for some insight into common challenges faced by Bay Area business owners when selling their business.

Maximizing the Value of Your Business

Regardless of whether or not a business owner is planning to sell their company, any experienced business attorney will recommend that making your business appear as attractive as possible is a responsible decision, although it can be challenging.

For many business owners, the first step in this process involves reviewing the financials of the company. If there are expenses being run through the business that are relatively more personal in scope or if you have outstanding loans or debt owed to family members or other partners in the business, it is imperative that you liquidate these issues moving forward, before presenting your financial reports to a prospective buyer.

It is also important that your accounts receivables are up to date. Sometimes, having an outside auditor or accounting firm review your company’s financial statements is advised in order to ensure your financial records are sound.

In addition to financial planning, it is important for businesses to verify that all contractual arrangements are up to date, especially contracts with key employees within the organization.  This is also an opportune time to review and improve your corporate governance and operational policies and procedures. All of these steps will help your company appear more attractive to prospective buyers, whether there is a current offer on the table or not.

Explore Wealth Opportunities

When a business is sold, the owner often experiences a sudden windfall of cash that necessitates prudent management. As any experienced business attorney can attest, the wealth experienced by selling a business can quickly deteriorate if the money is not properly managed and used to build wealth for the seller (i.e. business owner). The situation can become even more complicated if the financial goals of the business owner include passing on the proceeds of the sale of the business to family members, or rolling them over into a new business. 

There are a number of tactics that can be used to achieve these goals. For one, financial vehicles such as trusts can be implemented to reduce the tax impact of transferring equity or cash to a loved one following the sale of a business.  Additionally, the way the sale is structured should be carefully considered, as different structures can result in different tax implications.  

Unique opportunities to maximize long-term wealth potential as well as reduced tax implications are likely to emerge by taking these steps.  If you find yourself at a loss of how to best structure a sale, consider using the services of an experienced local business attorney.

Employ a Solid Advisory Team

Selling a business is a complicated endeavor. As you prepare for the sale, it is important to consider a number of different individuals who can help you structure the sale while allowing you to continue to focus on the day to day operations of your business. These individuals include a wealth management advisor, business attorney, business accountant, insurance professional, and business appraiser.

Professional Legal Counsel in the Bay Area

For years, the attorneys at Coepio Legal have been helping Bay Area business owners as they prepare to sell their business.