How to Prepare for the Sale of Your Florida Business

How to Prepare for the Sale of Your Florida Business

Selling your Florida business was probably the last thing on your mind when you were working so hard just to get it off the ground. But once that stage is behind you, selling your business is something you should give careful thought to, especially since it is estimated that 80 percent of a typical small business owner’s net worth is tied up in their business.

There are a number of options for divesting yourself of ownership in your Florida business, including selling to family, partners, employees or an unknown third party. Whichever route you choose, you will need to take the following steps:

Get a professional valuation. In order to be able to set a realistic price for your company, you will need to have a professional valuation performed. You can also perform some research yourself by checking industry sources to see what similar companies have sold for and when. In addition, you need to assess the value of any intellectual property and goodwill to arrive at an accurate sales price.

Know the tax consequences. Are you selling business assets or the entire entity? The way you structured your company — as a sole proprietorship, partnership, LLC or corporation — will play a role in determining the tax consequences you will face when you sell.

Get your financial statements into shape. Enlist the help of an accountant or CPA to ensure your financials are in good shape prior to any sale. He or she may advise you to recast your returns to reflect discretionary spending you made — say, for health insurance or bonuses — that prospective buyers may not make, which can provide a more accurate picture for prospects.

Determine how you will sell. You may need to set sufficient funds aside to market the sale of your business in local newspapers, trade publications or online. You may also want to consider using a business broker, who will be paid a commission.

Get help with negotiations. The negotiation for the sale of your business is where the advice of an experienced business attorney will be invaluable. You want to be sure you are getting the best possible deal for your company; an attorney can help you do this.

Creating the sales agreement. Again, the help of a Florida business attorney is highly recommended for creating your sales agreement. The sales agreement should include the structure of the sale, how you will be paid, any existing relationships or contracts the buyer will assume and the value of all business assets.

Preparing for the closing. An inventory of all the documents and other items (like building keys and security codes that need to be turned over to the buyer) needs to be prepared prior to closing.

After-sale paperwork. Once the sale is completed, you and the new owner may need to file an Asset Acquisition Statement with the IRS and include it with your tax returns.

Florida business owners who are looking to sell their business can avoid unnecessary risk by consulting with a qualified Florida business attorney. Contact one of the experienced Florida business attorneys at Jurado & Farshchian, P.L., at (305) 921-0440, or email us at info@jflawfirm.com

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