There is more to selling a business in Texas than a simple handshake and a nod. Multiple steps are involved, all of which are critical to the success of the acquisition process. There is no doubt that selling a business requires considerable preparation and planning, not to mention the need to understand basic legal concepts.
Here are three crucial questions you need to ask when selling a business in the Lone Star State.
Exactly what is my business worth?
Gauging your company’s value when it is up for sale can be a huge challenge. One option would be finding out how much similar businesses in your industry were able to bring in when sold — but finding that data is never easy. A better approach would be to engage a business valuation expert who will review all your records and provide a more authentic appraisal for your business based on the current market conditions. A professional appraisal can strengthen your bargaining position when selling your business.
What types of records do I need to prepare when selling my business?
Most small enterprises barely pay attention to their organization’s paperwork after the initial formation. However, the importance of getting your crucial documentation in order before starting the sale negotiation cannot be overstated. This is especially important if you are going for an entity sale where potential buyers will need to conduct due diligence before making the purchase.
What should I include in the final sales contract?
A sales contract is a written agreement that details all the relevant terms of sale of the business. Basically, this is the “guiding documentation” for the entire sale process. Among the items you should include in the sales contract include the type of sale (entity or asset), each party’s obligation prior to closing, the sale price, and the sale closure date.
A business sale is a complex process. If you are planning to sell your business in Texas, it is in your best interest that you avoid walking through this complicated minefield on your own. An experienced business law attorney can provide the information and advice you need so you can have the protection you deserve when selling your business.