Senior or executive staff resigning and taking valuable customer and confidential information with them could result in extensive damage to a business. Post-employment restraints or restraints of trade clauses, that come into effect after employment ends, can protect the legitimate interest of the employer.
Seven Practical Tips When Selling Your Business
Speak to Allied Legal’s commercial lawyers if you are considering selling your business
In the fervour of negotiating a business sale deal, it is easy for the seller of a business to lose perspective as they get caught up in professionals and legal and accounting paperwork.
To assist, we set out below seven practical tips for those about to embark on the process:
- Do you know what you want? It might sound obvious but being realistic about the financial and personal outcomes at the start will help you focus and provide you with parameters for the negotiations.
- Stay on course and don’t get side-tracked. Being adaptable to changes is good but be clear about the terms of the deal. Don’t be talked into something that ends up looking materially different to what you originally wanted.
- Be clear and realistic on value. The buyer wants your business but, in most cases, not at a value which can’t be justified.
- Keep perspective. Selling a business can be a stressful process. You may run the full gamut of emotions from elation to despair. Yes, it is very important to you but not at the expense of jeopardising your health and future well-being.
- Pace yourself. It invariably will take longer than originally expected and you need to plan accordingly.
- Be prepared for change. Experience tells us that sellers should avoid all but the shortest interim involvement with a business they have sold. Every buyer will have their own views about how to improve your business and you don’t really want to be there while they are trying to do it.
- Cash is king! Earn-outs are the buyer’s favourite form of consideration and years of experience dictate that they very rarely work as expected. To the extent possible, negotiate a deal where you are paid as much as possible up front.
Contact Allied Legal
Allied Legal’s commercial lawyers in Melbourne are highly experienced when it comes to advising on business sales and purchases. We provide free 30-minute initial consultations to help understand your legal needs. Please contact us when you are ready for specialist advice: http://alliedlegal.com.au/contact/.