Most business sellers are interested in disposing of their businesses as quickly as possible. But that's not how an auto warranty services business sale works.
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Yet what many sellers don't appreciate is that a down economy can present the perfect opportunity to sell a auto warranty services business.
A basic understanding of legal requirements is foundational for a successful business sale. Despite the confusion that exists among many sellers, the essentials of the sale are described in the Letter of Intent, a seminal document that is created prior to due diligence . By the time the deal reaches the final contract, many of its features are set in stone. Never sign a Letter of Intent until it has been properly reviewed by your attorney and you are in complete agreement with everything it contains.
Turning the Tables: Buyer Concessions
Sellers aren't the only ones who can make concessions in a business sale. In many instances, sellers can request buyer concessions. Although this scenario frequently plays out around seller financed deals, it's possible to push for a higher sales price or other form of compensation if you agree to mentor the buyer for a specified period of time. You can also choose to exclude certain items like equipment or inventory from the deal if the buyer isn't willing to meet your price expectations. By selling excluded assets on the secondary market, you can compensate for an anemic sale price.
Objectivity is a rare commodity in a business sale. Your estimate of your company's worth is probably skewed by your emotions and your close, personal connection to the business. In our experience, the most successful sales are ones in which the seller has made an intentional effort to remain objective and set realistic expectations. A business broker can be a valuable resource in right-sizing your expectations and preparing you for market realities.
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