In Denver, Colorado, business owners who are considering selling their businesses should understand that timing is critical in such situations. Asset sale transactions involve a process and, therefore, business owners should understand the step-by-step process to ensure a smooth transition. Nobody wants to buy a company that is not in good shape, which is why business owners have to focus on the preparation for the benefit of the new owner of the company.
First, the business owner must prepare the exit strategy. The owner will have to show evidence of profit or potential growth of the company. This gives the buyer confidence and makes the business entity more attractive on the market. Second, the business owner must protect the business' intellectual property. For example, if the business handles software development, it is important to obtain copyright protection. By doing so, the company will be able to determine if it is infringing on an already-known trademark or copyright, which could trigger a lawsuit. Third, it is important to ensure that the business is not dependent on the business owner or the seller. For example, businesses that rely on one person's talents can be difficult to sell, especially if the seller is also the owner of the business.
Fourth, business owners have to know the total worth of the company. With the help of independent appraisers, business owners can determine the worth of the company and avoid settling for a smaller amount. Fifth, it is important not to keep secrets from potential buyers. Business owners who are selling their businesses have to be honest during the transaction, as failure to do so can lead to litigation.
To ensure that everything proceeds properly, business owners may wish to be represented by an attorney who is knowledgeable about business laws and who can protect the business' interests.
Source: CNBC.com, "5 ways to sell your business at a peak price in 2014," Elaine Pofeldt, Jan. 7, 2014