By: Thomas Law Group On: August 11, 2022 In: Business/Employment Comments: 0

All business owners will get to a point in their careers when transferring their business to another owner will be considered or is a future expectation. The hope, of course, is that this desire is actually a viable option and can be realized.

Without foresight and planning ahead for the sale of a business, this may not occur for several reasons including: 1) the business is not profitable enough to sell; 2) a willing buyer cannot be readily identified; or 3) the business owner unexpectedly dies or becomes disabled. While this is not meant to be an exhaustive list of why businesses can’t be sold, they are some of the key reasons. As a result, in order for a business owner to sell for a satisfactory price and at a time that works for the business owner, they need to take steps ahead of time to ensure this can be a reality. Sellers should seriously be planning this transfer several years (2 to 3) before they intend to transition the business. A prudent seller will begin planning the sale as soon as the business becomes profitable or will work to make the business profitable so it can be sold.

Assembling the business owner’s professional team will be crucial to a successful sale and should include the company tax and accounting adviser(s), the seller’s personal financial adviser(s), and the company attorney(s). If the company has a particular lender who understands the business and has been involved in prior lending for the company, they can also be key in facilitating the plan to sell. For example, the lender may still hold secured interests against the assets of the business from prior or existing loans which will need to be considered, and depending on the structure of the sale, have to be released prior to sale. The seller’s lender is often a good resource for the buyer’s funding because of their experience and knowledge with the selling business.

While there are many things that need to be considered for a sale and transfer of a business, the attorneys at Thomas Law Group are very familiar with such transactions and can be of great assistance in helping a business owner review the possibilities and begin to map out their preferred course of action for selling their business.