HOW TO SELL YOUR BUSINESS

April 19, 2022
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Reviewed by Josee Girard, notary at PME INTER Notaire Saguenay, July 2014 Where to start? Who to trust? How to proceed? The sale of a business is often a pivotal stage in the life of an entrepreneur. Getting the right people from the start is the most important consideration to ensure the success of the project. The notary is a leading professional to act as a leader in the file. Here are some tips on the art of selling a business through the help of M&A advisory.

THE JURIST

The sale of a business requires the drafting of several legal documents, including a letter of intent, possibly an offer to purchase or a promise to sell, and a sales contract. This is why the seller must surround himself with a lawyer who specialized in corporate law. The recipe for a good legal adviser, a notary, for example, lean management is to know how to popularize and simplify the process for the entrepreneur who sells his business. The role of the notary becomes that of a real quarterback:

·         he assumes the leadership

·         control and validate the information

·         coordinates the professionals involved

·         composes with the representatives of the buyer

The notary is called upon to create a climate of trust with other legal, tax, and accounting professionals. Its objective is to facilitate negotiation between the parties with the aim of concluding the transaction without risking losing the seller. The exercise can be quite complex, especially when the emotions of the entrepreneur come into play.

NUMBERS

Accountants on both sides are also among the professionals involved. Their role is to determine the value of the company. They are often the first professionals consulted in the project, in particular, to plan the tax aspects and to establish the fair market value of the business. The Seller’s accountant will provide, promptly, the financial statements and other performance results requested. The buyer’s accountant will provide a second opinion. Occasionally, a broker specializing in business sales, whose role is to find potential buyers, intervenes in the file. If the seller can surround himself with professionals accustomed to working together, then the process is improved.

THE DIAGNOSIS

A few good meetings with the notary will allow the seller to understand the stages of the sales process and the role of each stakeholder with the assistance of a M&A advisor. The best time to sell should be determined based on business value, profitability, internal operations, and market conditions. The diagnosis makes it possible to know if the potential of the company is optimal and if it is ready to be sold. A good quarterback may even recommend, if necessary, postponing the sale to a more favorable time.

INFORMATION CONTROL

 

You have to be ready for verification requests from potential buyers while ensuring control and confidentiality of information. The information must be given in small amounts, from the least confidential to the most confidential. When the funding condition is lifted, the most sensitive information, such as detailed lists and meetings with lean strategy, may be authorized. Among the important information that must be provided, after the purchase offer and on the recommendation of the notary, we will find:

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