From taxes and financing instruments to training the buyer and keeping the transaction confidential, there are dozens of issues that must be considered when it comes time to think about selling a business. We’re going to chat about a few here that are guaranteed to come up during negotiations. If you’re considering selling – or buying, for that matter – spend a few minutes with this post and then some time thinking about the following issues.
Payables and Receivables
Payables are another story. The buyer is unlikely to want the payables but you don’t want to keep them especially given that the products they are meant to pay for will, as of the date of closing, belong to the buyer. A buyer may want you to negotiate new terms with your suppliers that will allow the buyer more time to pay or to take a discount for immediate payment. If you, as the seller, keep the payables, make sure that the purchase price accounts for this. Up front planning that considers payables and receivables will help you set the price/value of the business and is the only way to be ready to address this topic when it inevitably arises
Cash On Hand
There are, of course, many more issues that must be addressed when gearing up to sell your business and I’ll be writing about them periodically in the future. If you have any immediate questions about how to handle a certain issue, let me know in the comments box below.
One final note. We are changing our posting schedule to a more focused format and while I will still be posting every Monday afternoon, each month’s posts will be geared toward a certain group such as sellers, buyers, folks looking for financing, folks that want to become business brokers, etc. Our podcasts will become more focused as well and will be posted at the end of each month recapping the posts from earlier in the month and addressing any comments and questions we may have received about those posts. Hopefully, you will find this new format helpful
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Thanks for reading! See you next week.