Now that you have made the decision to sell your business, you should define the basics. Those are the who, what, when, where and how of the transaction.
The "who" can be defined from many angles. For example, "who" is the seller? Is it you, a group of partners or shareholders, a corporation, family, or an amalgamation of a group of people? Sometimes you need to consider others in your decision. Is there a landlord or a franchisor who has to sign off on the transaction.
Other examples of "who" might be who is going to sell the business? Are you going to sell it yourself? Will you list it with a business broker? Does that broker have experience? How many business sales has the broker sold? How many people have they helped buy a business? Do they understand the process? Have they done enough to recognize the pitfalls? Will they understand your business, and what makes it unique?
"What" are you selling? Businesses are comprised of a number of very important components. One of the most important is the name and reputation of the company. You also have the fixtures, furniture and equipment (FF&E), inventory, patents, trademarks and other intellectual property, customer lists, your facility, your contracts and your know how. Your broker can help you best present "what" you are selling.
Do you want to sell the company right away? Would you prefer to get the business ready for sale so that you obtain the best price, and insure the business has a long life with the new owner. Are you planning on consulting for the new owner? The "when" can be one of the most important aspects of a sale.
Where is your business? Where are your clients. Do you own the building? Are you a franchise? If so, are you selling the territory?
Many times business owners think they are going to list their business for sale, get an offer they like, sign over the stock certificate, the walk away with a check. More likely than not it will be more complicated.
The most likely scenario is they will market the business, receive and negotiate offers, put the broad strokes terms of the agreement into a Letter of Intent, then let the lawyers work out the details of the Asset Purchase Agreement between the parties. This Asset Purchase Agreement will include specifics such as the representations and warranties, whether payment is by check or by owner financing, the term and duration of any non-compete agreements, and a detailed list of what exactly is being sold. Once all of that is worked out, the closing takes place and a bill of sale is exchanged for the payment.