4 Things to Consider When Selling Your Arizona Business
Entrepreneurs build businesses for various reasons. Sometimes it’s for the thrill of winning or facing the risk of losing. Or maybe an individual has a special talent that can be built into a profitable venture. At some point, however, business owners may find themselves in a position where they want – or need – to sell their company. When selling an Arizona business, there are at least four things to consider.
True value of the company.
Before offering your business for sale or considering any offers, make sure you know your company’s true worth. Don’t estimate or guess. Get at least one appraisal from a qualified appraiser. Overvaluing your company means it may not sell, while undervaluing takes money from your pocket.
Potential buyers might be looking for:
- Comparables – how much similar companies are worth.
- Forecasts – are there any projections that let buyers evaluate how much the company might be worth in the future?
- Accounting documents – buyers will likely want to see how profitable your company has been and where there might be a potential for liability.
Have everything lined up and ready to go before you meet with your first prospect.
Timing of the sale.
There are several things to think about here.
- Will being forced to sell quickly mean a reduced sales price?
- Is your market currently hot or cold?
- Are there forecasts that the economy will take a downturn or upturn soon?
So, know your market and try not to sell on an emergency basis.
Potential tax considerations.
Where will your proceeds go? Will there be tax consequences? The answers to questions like these depend on the type of company being sold and the type of sale. Before selling a business, consult with your attorney and CPA. They may have strategies that can reduce your tax bill.
Protection from liability.
Buyers and sellers both take on a certain amount of risk when a business is being sold. Be careful not to agree to anything and certainly don’t sign a document before your attorney has reviewed it. Among other things, a seller might need to sign contracts, indemnification agreements, and non-disclosure agreements. “Get it in writing” certainly applies here and definitely have a legal expert review that writing.
Selling a Business May Affect Your Estate Plan
When selling a business, you’ll need to consider a variety of factors including how the sale might affect your estate plans. Keystone Law Firm’s staff of attorneys have the know-how to analyze your current estate planning and help you make thoughtful decisions. Call us at (480) 209-6942 to set up an appointment. Although located in Chandler, we also work with clients in the surrounding communities like Sun Lakes, Gilbert, Mesa, and Tempe.