When you’re looking into selling your business, there are numerous legal and financial areas to consider with care. Lack of attention to detail in the business valuation and exit planning realm can lead to major financial consequences.
At Utah Business Consultants, we’re here to help you dot every I and cross every T. Our team can help you with every aspect of selling a business, from laying out your goals of the sale to diving into the financial nitty gritty of your sale. We’ve also seen business sales that have gone sideways due to a few different legal mistakes made by the seller – here are a few of these mistakes, plus how to avoid them during your sale.
No Letter of Intent
A letter of intent is a vital legal document that’s necessary for protecting yourself as you’re selling your business. It outlines the various expectations of the sale, from the basics like the total price and important dates to particulars like fees. It will include important clauses like termination fees, which stop buyers from walking away from the deal just because they got cold feet after a certain commitment threshold has already been passed.
Some sellers don’t use the letter of intent, and this is a mistake that leaves you open to risk. It may add just a little time to your deal, but it’s absolutely worth having your particulars in order to protect yourself.
Another important document in the business sale process is the non-disclosure agreement, or NDA. This agreement should be agreed upon and signed the moment you enter into even preliminary conversations about a sale with a potential buyer – once again, it’s here to protect you in case things go wrong.
Say you get a ways down the road with a potential buyer, but then the deal falls through. Your NDA protects you from that party then spreading around word that your business is for sale, or from sharing any proprietary details of your business that were shared during the negotiation process. There are several situations where protecting this kind of private information is vital for your eventual sale, so ensuring you’re protected is very important.
Not Working With Professionals
Simply put, there’s virtually no situation where you should attempt to sell your business without the assistance of a reputable business broker. We can help you cover every little detail of the process, including many that slip through the cracks when professionals aren’t involved. Our team includes brokers with years of experience in the business consulting, valuation and exit planning worlds, professionals who can help you understand every part of the sale and get the best value possible.
For more on legal mistakes to avoid during the business sale process, or for information on any of our business brokerage services, contact the pros at Utah Business Consultants today.