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Topic: Selling a business (Read 411 times) |
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jimmers
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Selling a business
« on: Oct 4th, 2005, 12:00pm » |
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Has anyone ever sold a business? I have a large electrical contractor that wants to buy my business. My company is in the communication cabling business and it has been brought to my attention that they would like to buy me out so they can offer that type of service as well. I'm pretty sure they like the fact that they will get a ready made cabling company and none of the hassles that go along with trying to start up new. I know what I want for the business ($) but am wondering about some of the other things to watch out for. Non-compete clauses, employment gaurantees (I will be working for them) etc.
Any ideas or thoughts. pm me if you want to.
Thanx,
Jimmers
P.S. If it works out well, I might even buy jonny a drink in Milwaukee 
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Jeepgun
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Re: Selling a business
« Reply #1 on: Oct 4th, 2005, 12:05pm » |
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You may want to consult with an attorney who specializes in corporate law, for starters. Good luck.
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marlinsfan
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Re: Selling a business
« Reply #3 on: Oct 4th, 2005, 3:09pm » |
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I worked in mergers and acquistions for 7 years before joining my current employers.
You have a sense of how much you want, don't tell them. Let them offer, never counteroffer. If you don't like the offer, explain to them why you think it's worth more, but don't give them the number. Have them come back with a better offer. You can usually get 2 or 3 offers out of a buyer before you need to counteroffer.
Assuming you get a deal agreement in principle, things to consider:
Any non-compete clause that they make you sign should be 1 year, not longer.
Legal fees, typically you'll have to pay your own lawyer to review the contract. Given that you're going to be employed by them, see if they pay for it,
Sell the shares of your company, not the assets. If you sell the shares, they assume any liability you may have.
Try not to accept shares of the new company as part of the package. If you are minority shareholder and the other owners have lots of $$, they can call for capital increases any time they want and if you don't put in the $$, they'll dilute you down to nothing.
Good luck.
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