The process of selling a business in Florida can seem arduous. Once a suitable buyer is found, there will be plenty of paperwork that needs to be drafted and signed. Sadly, many business owners tend to rush this, and this can cause disagreements that threaten the deal going through. To make sure you’re fully prepared, here are five things that you must know before selling your Florida business.
1. Get to Know the Engagement Letter
The engagement letter is a crucial document that will outline the working relationship between you and the advisor working with you through the process. Selling a business can be a lengthy process, and therefore an engagement covers the responsibilities of each party clearly. The term will refer to how long the agreement will last, and you should make sure that it is a realistic length when considering the norm for your industry. An exclusivity clause may also be included, but it is always your final decision when you want to go through with one.
2. Be Aware of “The Teaser”
You also need to be aware of “The Teaser,” which is a vital document that goes through the specifics of what you are selling. It is sent out to potential buyers without specific information being presented to identify the business. The role of a teaser is to find motivated buyers that would be willing to put in a reasonable bid. The best teasers are those that provide a comprehensive yet honest summary of the business and outline why a buyer should see it is an excellent investment. Due to its importance in the selling process, we recommend getting this drafted by a professional who knows the ins and outs of your business.
3. Make Sure You Understand Everything Involved with an NDA
Non-Disclosure Agreements (NDAs) are commonplace when it comes to selling businesses in Florida. They ensure that sensitive secrets are kept between a buyer and a seller. There might be certain aspects that could harm the business if they were released. Or a buyer may be looking for trade secrets. An NDA helps to protect any leaking of sensitive information since many confidential documents will be shared during the selling process. It is important that the NDA is clearly defined and has an appropriate length of the agreement.
4. Be Clear with the Letter of Intent
The Letter of Intent (LOI) is a document that you will receive from the buyer, and it will outline their intentions to purchase your business. They will set out their offer and provide the terms of the purchase. This will usually include certain closing conditions and specific requirements for due diligence. Make sure that you are aware of every detail included in this document so that you have the best understanding of what is being offered. This can prevent any obstacles coming to light later on in the process.
5. Always Utilize an Experienced Lawyer to Draft the Purchase Agreement
The end result of selling a business will be the purchase agreement. This is the final document that sets everything involved in the transfer. It is legally binding, and therefore you should always rely on an experienced business lawyer to draft this document. The best lawyer will be able to tailor this purchase agreement for the specifics of the transaction/deal.
Closing Thoughts
Selling any type of business in Florida requires a careful and considered approach. You should now have a much better understanding of five key items that are relevant to a sale. If you are thinking of selling your business, it is always wise to consult with a specialist business lawyer that can advise you through every step of the process.