Selling a Business in Florida: What to Consider
Selling a business in Florida can be a really exciting experience. You have worked diligently to build a company that is worth purchasing, and all that hard work is about to pay off.
Of course, you would prefer the process to be quick and seamless, but for that to occur, there are a number of things to consider when selling your business.
6 Things to Consider When Selling a Business in Florida
Before you even begin the selling process, here are some things to keep in mind.
1. Is Now The Right Time to Sell Your Business?
Market conditions, competitive landscape, and consumer interest all impact whether you are in a buyer’s or seller’s market. Consider consulting industry experts. It may be wiser to hold on to your business until the time is most appropriate.
2. Do You Have an Exit Strategy?
An exit strategy can be more than just the paperwork but should also include whether there is a non-compete clause or anything else that puts limitations on what you do next.
It is important to have an understanding of your personal next steps. Do you want to stay on as part of the management team, retire, or do something entirely different?
3. Do You Know How Much Your Business Is Worth?
There is no Kelly Blue Book for businesses like there is for cars. When it comes to selling your business, there are a lot of factors to consider, including all assets, liabilities, inventory, overhead, depreciation, and more. It is important to have an accurate appraisal, so you know where to start your valuation.
4. Who Would You Sell To?
If you started your business from scratch and are emotionally invested, you may not consider selling to just anyone. Does the buyer share your values and vision, or are they planning to change everything about what you have done? Take some time to consider what kind of buyer you feel good about.
5. How Much Information Are You Willing to Share?
Divulging some confidential information is necessary to ensure the potential buyer feels comfortable with the purchase. Keep in mind that you likely have multiple potential buyers, and you may not want so many buyers knowing your confidential information, especially if they are also potential competitors.
6. How Will You Set Your Purchase Price?
After conducting a detailed valuation of your business, you understand what your purchase price range should be.
Remember that there are other meaningful non-cash considerations to evaluate. Stock options, leadership positions, and other valuable options could impact what you are willing to accept.
How to Sell a Business in Florida
Each business is unique, so no two processes are exactly the same, though they are certainly similar. A big part of selling a business in Florida is making sure that you have all the proper paperwork. Consider seeking professional legal counsel to make sure everything is properly drafted and filed.
Engagement Letter from Investment Banker
An engagement letter details the working relationship between the seller and investment banking advisor. The advisor plays an important role in making the transaction happen. This document provides a clear understanding of each party’s responsibilities.
The “Teaser”
Similar to how the trailer for a movie works, the “teaser” is used to cultivate interest when you are selling your business. It should be professionally drafted and outline the investment opportunity for potential buyers.
Non-Disclosure Agreement (NDA)
Confidentiality is important in business dealings. When selling a Florida business, it is important to protect sensitive information such as business secrets and trade secrets such as recipes, production methods, client lists, and more.
Once the non-disclosure agreement is signed, the potential buyer receives a confidential information memorandum containing additional information to gain a better understanding of the company.
Letter of Intent
The buyer drafts the letter of intent (LOI) and delivers it to the seller. The buyer proposes structure and terms for the transactions, which may include purchase price, closing conditions, timeframe, and other considerations.
The Purchase Agreement
Purchase agreements are binding documents that you should have reviewed by a professional business attorney. You do not want to commit to something you do not understand or that is outside your expectations. This contract should consist of all negotiated provisions.
Feel Confident in Selling Your Business
The Pensacola business law attorneys at Emmanuel Sheppard & Condon have been helping clients since 1913. Regardless of how big or small your business may be, you have worked hard for what you have built and deserve attentive and knowledgeable legal representation.
Selling a business in Florida requires a lot of careful planning and review to make sure you are getting everything you are requesting and that there are no surprises. Contact us to get started on the process of selling your business for nothing less than what it is truly worth.
