Even if you’re not planning to sell your business anytime soon, it’s still a good idea to begin lining up a team of professionals to address key issues that may arise. This post offers a quick rundown of the “likely suspects.”
Business Broker
A business broker helps find buyers for your company. Using personal connections as well as business sale websites, they can help create a buzz around your business and find you a potential new owner. The good ones also help prepare your business well in advance of listing by making sure that you are on the right track to maximize the value and marketability of your company.
Succession Planning Consultant
If you plan to keep your business in the family or transfer it to existing employees, there are a number of transition issues to consider. Succession planning consultants can advise you about the pluses and minuses in each scenario, and help you evaluate whether you can successfully achieve those goals. Typically these consultants work closely with your estate planning attorney, tax advisors, financial planners, and CPAs.
Business Attorney
Your business attorney will advise you about your rights and responsibilities in any proposed transaction, help negotiate key terms, and make sure that all necessary legal documents are prepared (and reviewed) to make sure that the papers you sign reflect the deal points. Good attorneys will be team players, working well with your other professional advisors and helping you make informed decisions along the way.
CPA or Tax Lawyer
As noted several times on this blog, selling a business often carries a potentially hefty tax bill. While you may not be able to avoid the taxman completely, a competent tax professional can estimate the likely federal and state tax liability and help you take steps to reduce, or at least be able to pay, those taxes when they come due.
Estate Planning Attorney
Selling a business is a major event in most people’s lives. As with getting married (or divorced) and having kids, it’s a step that needs to be reflected in updated estate planning documents. Whether you have a simple will or a complex trust, it’s important to advise your estate planning attorney of your intention to sell so he or she can work with your financial planner to craft appropriate documents. And if you don’t have an estate plan yet, it’s definitely time to create one.
Financial Planner
Business owners often need help figuring out how to meet their financial goals. As we’ve seen in Business Killers, it’s important to have a separate stream of income to help fund retirement instead of reinvesting every dollar back into the business. A savvy planner also can assist owners as they begin taking steps to improve the value of the company. For example, if an owner needs to reduce excessive expenses that cut into net earnings, a financial planner may be able to soften the blow by “finding” hidden money in a personal budget.
Business Valuation Expert
It goes without saying that you won’t be able to price your business for sale if you don’t know what it’s worth. In addition, if you are entering into or updating a buy-sell agreement, you need to know how much money is needed to pay off a departing or deceased owner. Business valuation experts can provide an initial “back of the envelope” estimate or engage in a full-blown valuation.
Intellectual Property Attorney
If your business assets include patents, trademarks or copyrights, you’ll need competent legal counsel to advise you on how to protect your intellectual property. Many business attorneys are able to address trademark or copyright questions, but patent lawyers must sit for a separate bar examination before they can advise clients about applying for, maintaining or enforcing patent rights. Make sure you ask your attorney how much experience he or she has in these areas and get multiple referrals so that you are comfortable with the attorney you choose.
Insurance Advisor
Every business needs adequate insurance protection to manage risk. A good insurance broker who understands your industry is essential for making sure that you have the appropriate types of coverage and enough of it.
Banker
As the old Mark Twain saying goes, a banker is someone who will lend you an umbrella when it’s sunny, but wants it back the minute it starts to rain. Most businesses that have weathered the Great Recession understand this well. Although the economy appears to be moving in the right direction now, it’s still important to establish lending relationships. For businesses that are getting ready to sell, it may be necessary to upgrade equipment, make improvements or repairs to real estate, or increase market share. Having the right lender can help make it easier to borrow funds to handle those expenses.
Referrals
If you’re looking for someone to help you in any of these areas, check with fellow business owners or ask for a referral from your own attorney, CPA or other professional who knows your business. Each transaction is unique, and some of these roles may overlap or be unnecessary in your situation. Actual mileage may vary.