Are most buyers timid about buying an employee benefit and compensation plans business in today's economic environment? You bet.
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Success is a factor of preparation, execution and a keen eye for the market. As a business seller, you need to go into the process with the mental goal of presenting your business in the best possible light.
Selling an Employee Benefit & Compensation Plans Business to an Employee
Employee sales have pros and cons. A key employee may seem like a natural sales prospect. If you need to sell quickly, the timeframe is condensed in an employee sale because you don't need to track down a buyer. Yet most employees lack the means to buy their employer's business at or near the asking price. Seller financing is one way to get around the capital deficit of an employee-based employee benefit and compensation plans business sale, as long as you are willing to vet the employee's credit worthiness the same as any other buyer.
It pays to invest in first-rate legal counsel when you sell an employee benefit and compensation plans business. A good lawyer serves a variety of functions during the process. In addition to reviewing the letter of intent, sales contract, and other documents, your attorney should be capable of advising you about due diligence and the tax consequences of the sale. In some cases, an attorney may also provide assistance in securing long-term leases or vendor contracts to make your employee benefit and compensation plans business more attractive to buyers. If you don't know an attorney with experience in the business-for-sale market, ask your broker for a referral.
How to Identify Prospective Buyers
Many sellers don't realize how many prospective buyers there are for their businesses. We frequently see qualified buyers emerge from the seller's network of business and personal acquaintances. In other cases, sellers take a proactive approach to finding likely buyers and contacting them directly. Competitors may seem like natural prospects and they are. The downside is that they won't pay top dollar and will probably absorb your company into their own.
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