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Good morning!
Welcome to Fall 2014. Although I love the longer, lighter days of summer and hate to see it leave us, I also love the crisp mornings and colors of Fall and the possibility of new opportunity that it brings.
Usually, Fall means getting back into full work mode - although this summer was an unusually busy and productive time for most of my clients and colleagues. Having managed to squeeze in many long weekends at the beach, however, I have no regrets about the increased pace, and am more than ready to jump back in.
How about you?
Cordially,
Marijo McCarthy, Esq.
President, Widett and McCarthy, P.C.
Good contracts for growing small businesses
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| I Just Got an Unexpected Offer to Buy My Business! Now What? |
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Most of my long-term clients run successful businesses and have given at least a passing thought to their eventual exit. After all, they have risked a great deal over several decades to build the equity in their brand and, at some point, it will be time to reap the reward for hard work, commitment and investment.
Many of them have begun to consider the exit-planning process and what it will mean when they wake up the day after the sale.
But suppose a client - or even a competitor - called you tomorrow and told you they were interested in buying your business now? What would you do first? [Hint: It does not involve popping the cork on a bottle of champagne… at least, not yet!]
Let me share some initial tips…
- First, call some of the members of your professional advisor team. Initially, your lawyer and your accountant. Why? Keep reading!
- Second, no matter how "friendly" the approach, do not even consider having a substantive conversation or meeting without both parties signing a mutual non-disclosure agreement. Why mutual? If the initial interest is going to blossom into a real offer, both parties will need to exchange some basic information with each other [not the full candy store, but an offer must be based on some facts]. So, that's a job for your lawyer.
- Third, if the potential buyer has already mentioned an offer number, how solid is it? And even more important, how representative is it of the value of your business, all things considered? So, that's a job for your accountant, with in-house evaluation expertise or an outside professional who does just that.
- Fourth, since this offer came out of the blue, it is definitely time to do some housekeeping… all of those little niggling items still sitting on that ever-present and oft-ignored "to do" list to which you have been faithfully adding recommendations from your lawyer and accountant each year [you do keep track of those little nuggets of advice somewhere, don't you?]. Some of those items might be,
- Annual Report filings with the Secretary of State. Are they up-to-date? If not, visit their website right now and catch up. Make sure you have filed one for every year of your corporate or LLC existence since you first formed your business entity. If any are missing, file them on-line now and get this behind you.
- UCC filings with the Secretary of State. If you once had a line of credit with a bank and paid it off, did they release the UCC filing showing a lien on your assets? You would be amazed at how often this final step in loan repayment gets overlooked. Visit the search page and clean it up. If your bank neglected this step when you paid off the loan, call them and ask them to follow up.
- Corporate record and stock book. If you are an LLC, this doesn't apply, but if you operate as a corporation, is your corporate record and stock book in good order? If you are smart, your lawyer keeps this for you and adds major documents to it as the years go on. If not, it is up to you to be sure it is in good shape for review by a possible buyer.
When I help clients achieve a financial return on decades of hard work, risk-taking and resource investing [A/K/A sell their business], I walk them through the above steps before I move them on to the tougher questions and "due diligence."
A buyer, no matter how collegial and interactive the initial process goes, also has a team of professionals advising [sometimes in the background until the buyer gets a sense of how the initial approach is accepted].
Then, lo and behold, out pops a "due diligence list" and in you settle for a time-sucking, resource-draining process that will make your head spin [frequently on your own, since the preliminary foray is not something you want to or should share with employees]. The more you prepare for that process, the more smoothly it will go, something which will help keep tempers in place and nerves less frayed.
We will visit next steps in a future newsletter - I always find that bite-sized pieces of information are more easily digested than large chunks. In the meantime, try the preliminary house-keeping tasks above and see how prepared it makes you feel.
You just never know when that unexpected offer will land on your desk!
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| Just Beginning to Think About The Exit? |
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Selling your company is about much more than just the transaction itself.
It's about who you are now and who you plan to be when you no longer go to your business every day. It's about planning what you want to do in the next phase and how you can shape that now, before you exit. It's about way more than an asset vs. stock sale and how to minimize taxes. It's about you… as a person.
A colleague of mine provides clients with just this kind of thought-provoking analysis at www.theplatinumyears.com and I highly recommend a visit.
Whether you are just getting started, halfway there or about to close on the sale of your business, there is another side to the transaction that shouldn't be ignored. That's you… your plans, your dreams, how you look at the world in front of you when you transition out of the business you spent so many decades building and which is now the springboard for the next phase.
As I tell my clients when they call me with that first offer, you don't have to go it alone.
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| About Us |
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Widett and McCarthy specializes in advising small
business owners in the area of contracts.
Whether
reviewing a contract for services with your customer,
negotiating a lease with your landlord or finalizing
financing documents with your lender, we make sure
your best interests are protected.
In addition, and for
those clients whose successful growth requires a
more comprehensive relationship, we act as "general
counsel:" On-call when you need us as a sounding
board, legal advisor and strong right hand.
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Widett and McCarthy, P.C.
1075 Washington Street
West Newton, MA 02465
Telephone: 617.964.5559
Facsimile: 617.964.5529
Email
Us | Visit Our Website
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WHO WE ARE 
