How to Structure the Sale of Your Business

Prior to selling your business, you need to determine what is most important to you as a seller. Is it strictly price, or is it also the terms of the deal? Terms drive deals, and by negotiating the

By evaluating why you are selling, you can structure the sale of your business to meet your needs. For example, if you need immediate cash, you will want to structure your sale differently than if you wish to work part-time or stay on with the company after the sale.

How you structure the deal will be based on several factors including:

• The legal structure of the business. Is it a C Corporation? An S Corporation? A sole proprietorship? An LLC?
• What you are selling. Is real estate included? Are there assets that are not being sold? Are there assets or facilities in another location?
• The type of sale. Is it an asset sale? Are you selling stock? Are you selling part of the business or the entire business?
• Your tax situation. What will it be in the future? You want to structure a deal in such a way as to avoid a major tax bite.
• Seller financing. Will you be offering to help finance the sale? If so, what percentage will you finance? What rate of interest are you charging?
• The amount of the down payment. How much are you asking for as a down payment, and how much can be paid over time?
• Your plans after the sale. Are you planning to stay on after the sale to help run the business, or will you be available as a consultant?