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Selling Your Business? Don’t End Up Spinning Your Wheels

Lucere Legal helps with small business sale deals

The effort you put into getting your business off the ground could move mountains, but have you approached selling your business with the same commitment? You don’t want to be blindsided by a deal that falls through–the weeks of your time spent hammering it out are an investment that you want to be a sound one.  You can best avoid an unpleasant surprise by getting to know your prospective buyer.

Are they serious about making the purchase? Do they actually have the cash on hand or financing lined up? Here are several avenues of investigation to test their resolve:

Get full contact information. The most basic of the basic–all the more reason to be absolutely certain you have a full name and contact information for each of the involved parties. You don’t want the deal to fall flat, only to look back and see obvious red flags at the very beginning. If there’s more than person in the deal, make sure you are getting full information for each one of them and are able to freely communicate with each one. One person may be the primary person you work with, but that doesn’t mean they should be the only one you actually know.

Get a basic history. Build on the above. Where have your prospective buyers worked in the past? Have they previously owned another business? Approach it as a job interview. Afterall, you probably want to be sure your business is in good hands and there may a transition time in which you would be working side by side with these people.

Where do their funds come from? Be pragmatic–you need to have concrete evidence that they have the means to make the purchase. Ask how much they have and where it is coming from. Don’t worry about this being awkward; a serious buyer will be prepared for this question.

What are their immediate financial needs for your business? A serious buyer will often have their own requirements you and your business must meet. A minimum monthly income your business must bring in is commonplace. Does your business meet their qualifications?

Will they sign a confidentiality agreement before you share proprietary financial and business operation information?
Don’t give them too specific an answer to the above until they’ve agreed to take this standard step. If a buyer balks, it is a significant red flag.

What is their timeframe? If they can’t answer this unambiguously, they are probably not all that serious.

Ask why they want to buy your particular business. You business possesses more than mere monetary value. The years you’ve put into it and the relationships you’ve built reflect many of your core values, which you would like to remain fundamental to the operations of the new management. If you are uncomfortable with what they have to say, you may not want to go any further.

Get the counsel of an experienced business lawyer to ensure the process goes smoothly and your interests are properly protected.

If you want to learn more about this, see our Selling A Business page and be sure to watch the video we posted on preparing your business for a sale.

If you’re a small or mid-size business owner, call us today at (612) 206-3701 or fill out our contact form to schedule a small business consultation session.

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The first generation that buys a cabin enjoys it to the fullest and it’s a magical place where happy memories are made and families go for some much needed respite. Unfortunately, without thoughtful planning, the chances of the cabin staying a place of happiness and tranquility into successive generations is very, very slim.

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It’s no wonder that family members stop speaking for years after the cabin conflict is “resolved.” You can’t make family relationships perfect, but you can take away much of the fuel for the family conflict fire. That’s what cabin planning does, and it has the nice side effect of giving you peace of mind now.

That’s why Kimberly wrote The Minnesota Cabin Planning Guide and Workbook, and you can get a free electronic copy of her book on our cabin planning website, or you can find it in many county libraries in Minnesota, or you can get it on amazon.com.

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