When you intend to sell your business, it is essential to prepare fully for that sale. While it can be easy to focus on cleaning up loose ends as a buyer and ensuring that you receive a fair price, it is important to keep other considerations in mind as well.

1. You will need to prepare long before the company is sold.

Because the mergers and acquisitions process can often take 4 to 6 months, it is important to lay the groundwork for the sale early. This gives you time to prepare necessary financial and legal documents, helps you

2. A long-form letter of intent could be best.

Among the documents that you prepare for the sale should be your letter of intent. While you can make this a shorter document, a longer letter of intent can be an asset. According to Forbes, this letter should include:

  • Price and the terms under which that price will be paid
  • Insurance terms
  • Obligations to be fulfilled before and after closing
  • Conditions for closing
  • Guidelines for resolving disputes

Establishing these details not only lays out your expectations but allows you to set those expectations before negotiations begin. This can put you in a stronger position when negotiating with potential buyers

3. Consult with experts.

It is important to consult a lawyer and a financial adviser as early as possible in the process so that you can make your business ready for sale from a legal and financial perspective. This can help you prevent future liability issues, address the tax concerns and protect yourself from other issues that could arise from the sale.

Your lawyer can also help you establish a Non-Disclosure Agreement (NDA) or Confidentiality Agreement that prevents buyers from sharing details about your business to other parties.

4. Be sure to assess your own company to anticipate buyer concerns.

If you have missing documentation, incomplete documents, unsigned contracts or other loose ends, your buyer will uncover them in investigation. This can require additional work to remedy these issues before closing, or the sale may fall through entirely. With the help of your attorney and financial adviser, examine both your past documents and your future projections to ensure that they will hold up under the scrutiny of a potential buyer.

5. Have realistic expectations.

Especially if you have invested years of your life and career into your business, it is easy to have high expectations of the offers you may receive. However, it is essential that the expectations you have are also realistic. One of the top reasons business sales fall through is owners’ unrealistic expectations, and having realistic expectations about the time that the sale will take, the amount of money you will receive for your business and other details will help you avoid this pitfall. Your financial adviser can help compare your company with your competitors, examine your financial projections and set a reasonable price.

Through careful preparation and establishing your expectations early, you can successfully sell your business and enter a new phase in both your life and your business’s operations.