Florida offers fertile soil for small businesses to thrive. The search for prospective opportunities is constant, leading many brokers and investors to use the state as a base of operations to find profitable business transactions.
How should a small business owner prepare to sell a Florida company? Keep reading to find out.
Transferring Business Ownership in Florida – Outright Sale vs. Gradual Sale
Small businesses are not exposed to the same level of complexity involved in larger companies, especially corporate businesses with multi-state operations. Hence, a small business owner may decide whether to sell the company outright or opt for a gradual sale.
In an outright sale, the owner of a small company will transfer the ownership of the business in full. By selling the company as a whole, the transfer of ownership occurs immediately upon the buyer’s payment.
This type of transaction generally applies in cases where the owner wants a quick exit from the business, immediately receiving the due payment amount.
Conversely, a gradual sale offers small business owners a flexible option in transferring ownership of a company. In such cases, the original owner may still receive a monthly income from the gradual sale while waiving the obligations associated with running the company.
How Do I Sell My Small Business in Florida? – Taking a Closer Look
Before meeting with buyers, you must consult with a Florida business attorney to prepare a solid plan, explore the decision to sell the company, and identify whether selling is the right option for your case.
Proceeding with In-Depth Business Analysis
Valuing a business is a complex task that involves a detailed review of the company’s history, operations, and ability to generate income (both current and potential).
A Florida business attorney may help you identify and articulate how your company operates by reviewing the company’s financial statements, discretionary earnings, tangible assets, and intangible assets.
Meeting with Prospective Buyers
The business owner must meet with prospective buyers to talk about their plans and determine whether the transaction will benefit both sides. These initial meetings are crucial to filter the best opportunities.
At this phase, you should work with a well-versed business attorney to build a plan to guarantee the results you want. While some entrepreneurs tend to aim at better selling prices, others prefer a quick exit by ensuring an expedited sales process.
After filtering down the buyers with the financial pre-qualifications and interest required to buy the business, it is time to meet with the shortlisted buyers to select the best offer.
Completing the Transaction
Upon selecting the buyer with the best offer, the next step is to ensure all the essential conditions and contingencies are part of the offer.
Generally, the buyer will submit a Letter of Intent (LOI), which is a non-binding document declaring his or her preliminary commitment to acquire the company.
Once a business owner accepts a specific offer, the buyer must conduct the due diligence required in the pre-closing process. During the closing, a business attorney will help by:
- Creating, reviewing, and handling the necessary documentation
- Ensuring both parties are aware of their rights and responsibilities in the transaction
- Guarantee both parties meet the deadlines in the process
- Anticipate potential issues to ensure a smooth closing
- Ensuring the transaction’s legal compliance