Rock LaManna10.14.21
The finish line is so close. The buyer of your business is ready, willing and able. The closing date is set. As the seller, what do you need to be aware of before you sign the final paperwork?
Keeping the finish line in sight
In my experience working with buyers and sellers over decades, the most important thing is to keep moving forward. There are still many items left to do before closing. Your advisor will help you stay on track. You don’t want to be frazzled or fall behind.
Many types of buyers have a specific period when they can have access to funds for the purchase or have the approval of their partners. You don’t want to miss your buyer’s window because you could not keep up with due diligence or meet the requirements of their regulated process. Keep moving!
Choosing the right team
One way to make sure you will be calm and ready is to have an organized, experienced group of experts by your side. I’ve talked about this numerous times. You want your team to have the highest integrity. No secret alliances or conflicts of interest.
As an advisor, I want to stress that my expertise in this area has been as a participant on behalf of my clients. Also, I have heard stories from colleagues about issues that can come up if everyone is not prepared or completely transparent. This article is a general guideline and not legal, financial or transactional advice.
For that type of advice, you first will have the services of your attorney, of course, to prepare and review contracts and paperwork. Next, your accountant will make sure everything is presented properly. Items such as prepaids, prorations, and amounts owing will need to be tallied and applied to the settlement sheet. One issue you’ll be dealing with is the impact of selling your business if you have a PPP (Paycheck Protection Program) loan. Also, your tax attorney will be advising you on the tax strategies and consequences of the sale.
Your industry-specific advisor will be with you every step of the way, guiding you based on decades of experience and knowing the opportunities and pitfalls specific to the graphic arts industry.
Preparing for the unexpected
No matter how organized you are, there are always things that come up at closing.
First, it’s always wise to read the actual documents ahead of time and have all questions answered proactively. This will save time on closing day.
Second, bring a list of all contact phone numbers you might need. Make sure your phone is charged. Have your photo ID with you.
Third, I always recommend to my clients that they are well-rested, hydrated and fed. I do not recommend having alcohol before closing. You want to be able to coherently ask the right questions and understand what people are telling you. To be an informed seller, you must ask questions if something catches your eye or if you need clarification, but you must be calm and composed. Remember, the deal is not done until the last “i” is dotted.
Dealing with distractions
Another topic that can come up at the close is how you will communicate to employees, customers and vendors about the sale of the business. In addition, you’ll also be communicating with both creditors and your insurance providers about the sale. There will be notifications and closure processes with all of the places where your business is considered an entity, such as your municipality, agencies like the fire marshal’s office and DMV, your state, and the IRS. You will have a list of things to do with your bank that holds your business accounts and your line of credit.
I have found it is more helpful to unwind this process from the pressure of the closing date. Your advisor will work with you to professionally control the communication of the sale and what that timeline should be.
Items that owners may not think of when passing the baton include computer and software passwords, vehicle and building keys, security codes, copier access, parking passes, and the day-to-day items that can bring a business to a halt if they’re not included.
You’ll want your buyer to have a successful start on Day One, especially if you are not going to be available on-site as an employee or consultant.
Crossing the finish line
There are many other items you’ll need to be aware of – more than I can fit in this space. Your experienced team is your best resource and will help you get as much of this lined up as possible.
The goal is to have a smooth and predictable experience on the final day so you and your buyer can celebrate this new chapter.
Rock LaManna is The Deal Flow Guy. He helps qualified buyers and investors find businesses that are ready for acquisition or transition. On the sell side, he helps owners improve their businesses, increase value, and position strategically in anticipation of sale, exit or succession. Sign up for his newsletter at TheDealFlowGuy.com and start the process.
Keeping the finish line in sight
In my experience working with buyers and sellers over decades, the most important thing is to keep moving forward. There are still many items left to do before closing. Your advisor will help you stay on track. You don’t want to be frazzled or fall behind.
Many types of buyers have a specific period when they can have access to funds for the purchase or have the approval of their partners. You don’t want to miss your buyer’s window because you could not keep up with due diligence or meet the requirements of their regulated process. Keep moving!
Choosing the right team
One way to make sure you will be calm and ready is to have an organized, experienced group of experts by your side. I’ve talked about this numerous times. You want your team to have the highest integrity. No secret alliances or conflicts of interest.
As an advisor, I want to stress that my expertise in this area has been as a participant on behalf of my clients. Also, I have heard stories from colleagues about issues that can come up if everyone is not prepared or completely transparent. This article is a general guideline and not legal, financial or transactional advice.
For that type of advice, you first will have the services of your attorney, of course, to prepare and review contracts and paperwork. Next, your accountant will make sure everything is presented properly. Items such as prepaids, prorations, and amounts owing will need to be tallied and applied to the settlement sheet. One issue you’ll be dealing with is the impact of selling your business if you have a PPP (Paycheck Protection Program) loan. Also, your tax attorney will be advising you on the tax strategies and consequences of the sale.
Your industry-specific advisor will be with you every step of the way, guiding you based on decades of experience and knowing the opportunities and pitfalls specific to the graphic arts industry.
Preparing for the unexpected
No matter how organized you are, there are always things that come up at closing.
First, it’s always wise to read the actual documents ahead of time and have all questions answered proactively. This will save time on closing day.
Second, bring a list of all contact phone numbers you might need. Make sure your phone is charged. Have your photo ID with you.
Third, I always recommend to my clients that they are well-rested, hydrated and fed. I do not recommend having alcohol before closing. You want to be able to coherently ask the right questions and understand what people are telling you. To be an informed seller, you must ask questions if something catches your eye or if you need clarification, but you must be calm and composed. Remember, the deal is not done until the last “i” is dotted.
Dealing with distractions
Another topic that can come up at the close is how you will communicate to employees, customers and vendors about the sale of the business. In addition, you’ll also be communicating with both creditors and your insurance providers about the sale. There will be notifications and closure processes with all of the places where your business is considered an entity, such as your municipality, agencies like the fire marshal’s office and DMV, your state, and the IRS. You will have a list of things to do with your bank that holds your business accounts and your line of credit.
I have found it is more helpful to unwind this process from the pressure of the closing date. Your advisor will work with you to professionally control the communication of the sale and what that timeline should be.
Items that owners may not think of when passing the baton include computer and software passwords, vehicle and building keys, security codes, copier access, parking passes, and the day-to-day items that can bring a business to a halt if they’re not included.
You’ll want your buyer to have a successful start on Day One, especially if you are not going to be available on-site as an employee or consultant.
Crossing the finish line
There are many other items you’ll need to be aware of – more than I can fit in this space. Your experienced team is your best resource and will help you get as much of this lined up as possible.
The goal is to have a smooth and predictable experience on the final day so you and your buyer can celebrate this new chapter.
Rock LaManna is The Deal Flow Guy. He helps qualified buyers and investors find businesses that are ready for acquisition or transition. On the sell side, he helps owners improve their businesses, increase value, and position strategically in anticipation of sale, exit or succession. Sign up for his newsletter at TheDealFlowGuy.com and start the process.
