181 – All the ways to sell your business

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Show Notes

It’s time to sell your business!  This is a really exciting time but it can also be hugely stressful.  Today on the show we discuss three different ways you can sell your business.  This is so important to understanding your options. Remember that every day you spend running your business you should be thinking about selling your business.  Having that end goal in mind will give you a tremendous amount of clarity in your daily decision making. It will also make sure you’re prepared if something unexpected happens.  If there is a sudden market downturn or an illness in the family having a sale plan ready to go will be a godsend.

The first thing you need to do when thinking about a sale is understanding what you’re actually selling.  What entity did you structure the business under? What is that entities current assets and liabilities? These are questions that you need to talk to your accountant and lawyer about.  

The process

  1. Get all the information about your business together
  2. Interview business brokers about helping you with the sale
  3. Begin to consider any offers for the business
  4. Transaction process including due diligence
  5. Final settlement of the transaction
  6. Exchange of funds

Asset sale

If you have assets you can sell those assets.  You can free up some cash and get an under performing asset off your books.  An asset sale agreement details the terms of the transfer of an asset from one entity to another.  

Share sale agreement

There may be some reasons why you would want to sell shares of the business instead of selling it outright.  One of them may be that you only want to sell a portion of your business. The instrument for accomplishing this is called a share sale agreement.  

Listing on a stock exchange

Many great businesses have started small and ended up on stock exchanges around the world.  This is not for every kind of business. The process of listing on a stock exchange can vary.  It can take up to six months. There are a few broad steps to getting on a stock exchange

  • Get a team in place with experience in stock exchanges
  • Prepare a prospectus and due diligence
  • Market your IPO in what is sometimes called a “roadshow”
  • Lodge your perspective with a regulatory body
  • Lodge your perspective with a stock exchange
  • Marketing and offer period in second “roadshow”
  • Shares are allocated and trading commences

Don’t be afraid to negotiate

The broker will charge a percentage of the sale.   Make sure they are worth that percentage and whether you are comfortable paying them that amount.

More about this Show

We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms.  Most importantly we want to help you to develop a plan to take your business successfully into the future.  There’s a startling statistic the underscores the importance of developing a solid plan.  The majority of business owners are just seven months away from losing everything.  A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly.   Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients.  We want to close that gap once and for all.  We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.

Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV.  We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with.  Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.

Start here to discover your legal risks
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