Unlocking the Secrets: 4 Must-Know Tips for Selling Your Business

In this episode you will lear the 4 most imporant things you need to know when selling a business. Not knowing these 4 things has the potential to cost you millions when you sell your business. Spend 5 minutes to learn the things  you ABSOLUTELY NEED TO KNOW when selling your business. 

Visit us at:
Bsalesgroup.com
DesignMySale.com

Chapters

• 0:06 Intro and Welcome
• 0:57 #1: You Will Need to Train the Buyers for Free for a Negotiated Time
• 2:18 #2: You Will Need to Sign a Non-compete Agreement for 2-5 Years
• 2:51 #3: It Takes Work to Sell a Business
• 3:27 #4: You Don't Usually Get All of the Money Up Front
• 4:34 Summary and Contact Information

Transcript

Audio file

Unlocking the Secrets 4 Must-Know Tips for Selling Your Business 1.mp3

Transcript

Hello and welcome to M&A, murderous and accusations. The good, the bad and the ugly of selling your business. We dig into what you need to know and how not to kill the sale of your business. Now here's our host Rick J Krebs, mergers and acquisitions advisor.

Hello, this is Rick J Krebs and then a cowboy coming at you from Heber City, UT talking about M&A, murders and accusations, all things about selling the business and don't kill your sale, don't kill your deal. So today. I want to talk about four things that a business owner needs to know. When you sell your business. If you're considering a sale, you absolutely need to know these four things. Number one. They're going to require training from you. There's a certain amount of training during the transition and that's going to be part of the deal. Typically 30, sometimes 60 days. You know, sometimes the two days. What I often see is they'll negotiate, say, 30 days. But after you. Know a week or so the buyer and seller are tired of looking at each other and. Buyers like, yeah, get outta here. Go play, you know? But then they want it back. If they had an issue. So you're gonna need to provide training as part of the deal, typically 30 days once in a while, 60 days. So any work after that is typically paid. As an independent contractor. What I do like to see as part of the transition and training. You like to see an extended period where you're available or X number of hours for 12 months after the closing. If the buyer gets in a buying with the customer or with the client. And they need some help. They're going to. Want you to be available? You're going to be able to help them. Because typically you've got a seller note or earn out, so some of. Your money is tied to the hair profitability. So we typically see that and I like to put the number of hours and what it is at its bone consultation as needed, you know 10 to 20 hours for an extended period of time, usually up to a year and that's it. So we're not calling you every. Sunday night at 11:00 o'clock. And to bend your ear about what this employee did. And so forth. OK, #2 is a non compete if you're selling your company you have to be absolutely. Certain, I mean absolutely certain that you're not. Going to be. In this business or go into the same business for three to five years. The buyer does not want to pay you all this money and have you compete against them. So you're going to see non compete agreements as part of every transaction, you know and they are from two to five years typically #3. Takes work. If you're selling your business, I'm. Going to warn you right up front, it's a lot of work you're going to hire a broker and advisor and they're going to do a ton of work, but also it's like a second job. Just prepare for it. You know you've got a big paycheck coming at you at the end, but it is like a second job and some of it is weekends and some of it's evenings. This is the last thing you want to hear. But the first thing you need to hear it's work. It's a little bit like a second job and a lot of it's done after hours. Why is a sales confidential but usually don't tell employees or customers or anyone that it's done? And which are doing it until it's all. And then we tell them about it. OK, #4, typically you're going to see seller carry which is either in the form of an earn out or seller. Note or both. There are some all cash transactions and we need to, you know we love those. You do those and I did in a couple last year, but I would. Say the majority. Require some sort of seller carry or some sort of. Owner each of them have their pros and cons, but just plan on that. You're not going to get all your money up front as the rule. Sometimes you do. But most of the. Times you don't. And typically the seller notes are two to five years. Banks have a little thing that they like right now called the standby provision, which means that they, according to the bank rules, that the sellers are not supposed to be paid. On that note until the first one you just paid off, which is 10 years. Buyers and sellers hate it. There's some different things that people do, but just plan on carrying the note and know that you're in second position behind. Buyers and behind the bank. So those are four things that you absolutely need to know about selling your business. Thank you and have a great day.

Thank you for attending our podcast. We invite you to join us for future episodes of M&A, murders and accusations. The good, the bad and the ugly of selling your business. You can also visit us at www.bsalesgroup.com or e-mail Rick directly at rick@bsalesgroup.com.