You set a realistic sales price, your business received a much needed sprucing up and you understand the tax consequences you incur when selling your business. Now let’s go find a buyer!

Finding a Qualified Buyer

A successful business broker provides an excellent source for finding potential qualified buyers. Business brokers assist in advertising your business and finding potential buyers. You too should put out the word in as many different ways as possible. Tell friends, employees and customers that might have an interest. Newspapers, business trade publications and web sites that offer businesses for sale all hold the potential of bring a buyer. While all these sources get the word out, a good business broker knows how to qualify and prepare the right buyers for a sale.

Be Prepared for Negotiation

Each buyer presents special needs and possible special requests. Be prepared with opportunities for financing at least a portion of the sales price and possibly accepting a lower down payment or the pay off of the down payment in installments in exchange for a better asking price. The buyer may not want to purchase all assets of the business or may want to purchase assets you weren’t planning to sell.

Document the Sale Terms

A sales agreement documents the terms reached with the buyer, providing all the agreed upon terms. The sales agreement should include the sales price, payment terms, a list of all assets and liabilities of the business to be included in the sale and what constitutes a default in the contract. Include a list of all contracts and leases and the terms of assuming each. Seek the advice of a competent business attorney, ensuring the sales agreement is reviewed for covering all your bases and legally binding.

Closing

The closing meeting transfers your business to the buyer and the agreed down payment to you. Provide complete inventories, copies of leases and contracts being assumed, contact information for employees, lessors and employees, customers, keys, alarm and safe combinations and a myriad of other information the new buyer needs to successfully run his new business. The buyer’s success secures full payment.

File Paperwork

Depending on the type of entity you sell, you may need to file documentation with your county or state. Also complete IRS form 8594, Asset Acquisition Statement, with the buyer and file with your tax returns for the year of sale.