This article1 discusses why it is a serious mistake to postpone planning for the sale of your business until you find a buyer. By not planning in advance for your exit from your business:
- You will lose the opportunity to structure your company and the sale to be as advantageous as possible to you as the owner;
- You will lose the ability to conduct the sale as an auction to create a bidding competition, which usually produces the highest price for your business;
- You will not be able to modify the ownership structure of your company (e.g., to include key executives as minority owners, or to transfer ownership for estate planning purposes), nor change the form of the business entity to be best for you and the company’s employees for tax purposes;
- You will pay higher professional fees than if you had started planning in advance of the sale; and
- Because you have not prepared in advance for the buyer’s due diligence investigation of your business, it will be more disruptive and time-consuming and may cause the buyer to reduce the offered price, or even to walk away.