If you are preparing to sell your company, there are some big mistakes that entrepreneurs commonly make, including failing to:
- Create Competition. Don’t limit your selling base to one potential buyer. In order to obtain the best price possible, create a competitive bidding process, or at least the perception of one. In order to accomplish this, you may need to retain a professional for assistance.
- Negotiate Strong Letters of Intent. An entrepreneur has the most leverage when negotiating the letter of intent (LOI), so take advantage! Use this time to negotiate the material terms of the deal and play the bidders against each other in order to obtain top price and terms.
- Retain Legal Counsel. Having an experienced corporate attorney on your side is essential, especially if the buyer has its own sophisticated legal team. Additionally, if you plan to stay on and work with the new company after the transaction closes, having the lawyers handle the negotiations can preserve your relationship with the buyer’s management team.
- Cap Liability. You want to protect yourself if something should go wrong post-closing and set a cap on liability. For example, if there is a misrepresentation in the sale agreement, the buyer is only able to recover a set amount (which is typically a percentage of the purchase price).
Selling your business can be overwhelming. If you want to avoid making the above mistakes, contact the business lawyers at The Swenson Law Firm. We can help ensure you obtain a competitive price for your business while protecting your best interests and minimizing liabilities.