Quazar Quips© Volume 1, Issue 4
Who Should be Involved in the Selling Process?

The weather in Minnesota has officially turned to summer and, for many of our friends, that means getting out on the lake, grilling out with family, or spending a nice day at the park. While we here at Quazar Business Brokerage do like to take advantage of the summer weather, June also means something else to us: it means most business owners are done with last year’s taxes and have had a chance to reflect on their company’s 2015 financial performance. And after looking back on the year, many business owners are starting to look forward and contemplate a possible transition of their company. When we get phone calls from business owners who are considering selling their company, one of the first questions we get is “who should be involved in the selling process?”

Exactly who to involve in the selling process varies and is ultimately up to the business owner. However, based on our experience, we have some thoughts regarding who to involve in the selling process.

  • Family Members: Small to medium-sized businesses are oftentimes family businesses, with multiple family members involved in the company. In addition to speaking with any spouse not involved in the company, business owners should speak with family members in the company and ensure that selling to an outside party will not cause a major disruption to their business or family. 
  • Other Shareholders: In order to preempt possible issues with a sale, we recommend having discussions with other shareholders prior to selling. At a minimum, business owners should ensure that any buy-sell agreements are honored; however, even without a buy-sell agreement, minority shareholders may have interest in being first in line to acquire the majority stake of the company. 
  • Key Employees: Which, if any, key employees are brought into the selling discussion is situation dependent and often is largely dependent on who a business owner is comfortable informing and/or who needs to know in order to execute a sale. Sometimes these discussions can lead to management buyout situations. In any case, the buyer of a business typically wants to ensure key employees will remain with the company after a sale. In order to keep key employees happy, opening up the lines of communication sooner rather than later is often beneficial. Making equity available, granting stay bonuses, and ensuring non-compete agreements are in place are all useful tools in retaining key employees. 
  • Attorney: Retaining an attorney with experience in mergers and acquisitions is invaluable. While much of the attorney’s contribution will be in drafting the purchase agreement, we recommend bringing them into the process as soon as possible, as a little bit of legal advice early on can make the process move much smoother. 
  • Tax Strategy Adviser: This can take the form of a tax accountant or financial adviser who is well-versed in tax strategies. Even if you are years out from a sale of your business, we recommend meeting with a tax expert, as many tax strategies involve planning many years in advance of a sale. Regardless of the amount of time you have to plan your tax strategy, the sooner you start the better.
  • Business Broker: We saved the best for last! A knowledgeable business broker can help you find the right buyer, negotiate on your behalf, and serve as a coordinator of your entire team of professionals. At Quazar Business Brokerage, we take great pride in being deeply involved throughout the entire selling process. 

It is extremely important that no matter who you ultimately choose to involve in your business transition, the entire group works together as a team. We understand that selling your company is a major life event; and, in order to ensure a smooth and successful sale of your company, everyone involved in the selling process also needs to understand the importance of the sale to you. Please keep this in mind when determining who to include in the selling process.

Thank you for reading Quazar Quips, a monthly newsletter discussing the Business Brokerage market for deals between $1 million and $5 million in value.  Each month, Quazar Quips will keep you informed about statistics, trends, helpful thoughts within the Business Brokerage deal space.  Stay tuned for next month’s newsletter, where we will discuss “Why Should I Pay a Broker to Sell My Business?”  If you or someone you know is thinking about selling their business, please contact Adam Webb at (763) 550-9555.
Contact Us
Adam Webb, Managing Director adamw@quazarbusinessbrokerage.com
Bruce A. Behm, Founder bruceb@quazarbusinessbrokerage.com
Phone: 763-550-9555 www.quazarbusinessbrokerage.com

Bruce Behm is a licensed real estate broker of Quazar Business Brokerage
Quazar Business Brokerage©, 3535 Plymouth Boulevard, Suite 210, Minneapolis, MN  55447 Want to change how you receive these emails? You can update your preferences or unsubscribe from this list