Denver Business Attorney Writes About Marketing Your Business for Sale

Just as you had to market your business to make the business successful and grow, you must also market your business properly to Denver Small Business Attorneysell your business.  Although, many of our clients have succeeded in marketing their business product or business service, when it comes time to sell their business, they do not know how to market the business for sale and thus ask our Denver business attorneys, “How do I market my business for sale?”  The article below has been drafted by a business attorney at The McGuire Law Firm and should shed some light on marketing your business for sale or transfer.

Consider and Find Potential Buyers: If you know you will be selling your business, it never hurts to be considering potential buyers years in advance.  The potential buyer never has to know you are considering them a potential buyer, it simply helps to put a list together.  When considering these potential buyers, you should look for a “synergistic” buyer that is involved within your industry in some form or fashion, and may be willing to pay top dollar for your business.  This synergistic buyer may even be a competitor.  In addition to competitors, look at vendors, key management personnel, key employees and companies who purchase businesses in your industry.

Screen Potential Buyers: Acquire as much information about each potential buyer and thus “qualify” each potential buyer prior to providing any information about the business.  If you must disclose any information, make sure you have a non-disclosure agreement in place with the proper third party prior to disclosing any information.  Judge and rank all potential third party buyers that you have any contact with and determine if you should continue negotiations.

Meet With the Potential Buyers:  After screening contact and meet with the potential buyers you feel would benefit the most from acquiring your business and that have the financial ability and interest in buying your business.

Now the marketing and salesman in you must enter the room.  Provide your top prospects with an offer memo, sometimes called a offering memorandum.  The memorandum will describe the business and value the business.  Further, this document can be the initial step to show and prove to the potential buyer why they should buy your business and why they should pay the purchase price you are requesting for the business.  This document will set the foundation for future negotiations and can be followed up with due diligence documents to substantiate the figures in the offering memorandum.  You must sell your business within the offering memorandum and the due diligence documents.  Do not just provide three years tax returns and income statements.  Show the increase in profit margins, decrease in expenses, industry growth and reasons the business is worth the money you are asking!

When a potential buyer expresses interest in your business, obtain a letter of intent, which is a document whereby the potential buyer agrees to follow through with the purchase, given the documentation provided through due diligence shows that the prior information provided is correct.  Of course, valuation and issues uncovered through due diligence can become quite subjective.

At this point it is time to move forward with the due diligence, negotiating and selling the business!  A Denver business attorney at The McGuire Law Firm would welcome the opportunity to discuss your business and the potential sale of such business with you.  We represent both buyers and sellers at all levels of the transaction, including analyzing the tax implications of a sale or purchase.

To speak with a business attorney in Denver, contact The McGuire Law Firm and schedule a free consultation.