I split this up into two posts be sure to look out for the first six steps to maximizing the sale price of your company. Or these steps will also increase the value of your company if you are not thinking about selling your company now.
What did I miss? What do you agree with? What needs to be added? What should be taken off the list?
• Know Your Businesses Worth - you need to know what your worth to the company is and what the company is worth. You may be able to negotiate an additional consulting contract to increase the total value of the deal. Do your research on your value and remember you likely will be 1099'd this consulting, so be sure to add payroll taxes and other benefits into your value. You don't want to be consulting at your normal take home pay divided by 2080 hours.
Know what your business is worth too. The market will tell you what it's worth, but you should have a realistic and optimistic value in mind. Make sure there is some rational thinking behind this number. Also, know what you are going to be able to finance. A deal where you get all the cash up front might be worth a small discount on the price.
• Know Your Contracts - check out your utilities and other contracts you may or may not know about. If your buyer decided to close down your location, do you have any long term contracts for garbage, electricity, phone, internet etc. I was surprised when I looked to close all of these utility accounts down that some had additional costs I did not know about.
• Know Your Budget - it's very likely there will be a hold bavk or an earn out of sorts to make sure what you had said was true. You likely won't get all your money up front. Just negotiate a safe place for that money to be held with someone you trust. Be crystal clear when that money will be released.
• Know Your Process - will the new owners be able to come in and run your business with little training. Make sure you document at the very least key processes you perform so the new owner can step right in. Who knows, you might have an inventory policy or other marketing policy that the owner will find valuable and can justify giving you a higher price for your business.
• Know Your Marketing Lists - build your social media accounts, build your text subscriber databases, build your email lists, improve your search engine rankings etc. Be sure first you have a list of all these accounts and approximate numbers and passwords. This will make the transition much easier when you can hand over this information.
• Know the Paper Work - you may have to file some paperwork with your state or change the name of your business with the State as well. Just make sure what you need to do regarding your name and any paperwork with you selling a majority of your assets.