Checklist for Selling Your Business in Santa Ana, CA
- Oct 25, 2021
- 4 min read
Updated: Sep 12, 2022
What Do You Need To Do Before Selling Your Company In California?
You have more to worry about than just finding someone to buy your business. There's a lot to liquidate, file, and process before you can let go of your business. So here's a quick checklist on selling your business in California, as often overseen by a Santa Ana Business Law Attorney.
1. You Need A Reason For Selling
A prospective buyer will inquire as to why you are selling your company. You can assist the buyer in making an informed decision by providing a valid rationale.
One of the most prevalent reasons for selling a business is a change in the owner's personal life. Changes in health, family obligations, retirement, or unanticipated situations are all examples of personal reasons.
It's also possible that your company has grown too fast or too big for you to handle. You might be facing high taxes and production costs that you can no longer handle and decide to sell the company off to someone willing to take them on.
There are a few business owners looking forward to being free of the stress of running a company to explore other hobbies. A change of lifestyle or new professional prospects can be obtained by selling the firm. As you can see, the reason doesn't have to be groundbreaking for you to decide to sell your company. You just need to provide those reasons for the potential buyer.
2. Collect Documents And Important Data Before Selling
When selling a business, you may be needed to provide the following documents:
Financial statements
Tax returns
Clearance certificates
Fixtures and equipment list
Inventory's estimated value
Employees' list
Clientele lists
Leasing agreement
Franchise contract
Equipment leases
List of loans with balances and payment schedules
Provide financial details solely to serious potential purchasers to prevent handing out information that could be used against you. You can also have a non-disclosure agreement signed by a possible buyer.
Any business of any size should be able to provide this information to their prospective buyers. However, if you need some help gathering and listing all the documents you need to go forward with the sale, contact a Santa Ana California Business Lawyers to help you out.
3. Conduct And Compile A Report On Your Business Evaluation
You can get an estimate of what your business is worth by looking at the selling prices of similar firms in your area. It's critical to evaluate both tangible and intangible assets when calculating the value of your company.
Buyers may be willing to pay more for a well-established company with intangible assets, such as:
The current standing, brand recognition, and status of your business
Customer trust
Customer service
Expertise
Customer loyalty
Make sure that the evaluation is realistic. Of course, some buyers will try to talk you into selling your business for less, but if the assessment is realistic, you'll be able to easily justify its price.
Present your company to a buyer in the same way you would want to see it if you were buying it. Make sure that potential purchasers are aware of your company's beneficial aspects.
Finally, take your time when negotiating the sale of your company. Examine the proposals you receive before accepting them, and if necessary, make a counteroffer.
4. Hire A Broker
As said, selling your business entails a lot of essential steps and documentation. One way to help you get the most out of the process is to find a business broker to help you.
Some of the benefits of using a business broker include:
A broker can function as your agent and save you time by dealing with potential purchasers on your behalf.
Some potential purchasers may prefer to speak with a professional middleman.
A broker who specializes in a specific area may know people who would be interested in buying your business.
5. Hire A Santa Ana Business Lawyer To Help You
When it comes to finding help from experienced professionals, finding a broker isn't your only option. You might also need some help with the legal side of things.
A lawyer can be consulted for help with any legal issues, including:
Putting together an overview of your company for potential customers
Drafting contracts for selling and transferring assets
Reviewing any contracts and other legal documents before they're signed
6. Inform Your Employees
Ensure that your staff learns about the sale from you rather than from someone else. Whether you tell them before or after you sell, some of your employees may decide to look for work elsewhere.
This might also help the transition process for your employees. You don't want to leave them blindsided by the significant changes, so take the time to inform them.
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