So, you’ve considered the market and the time feels right to sell your business. It’s a big decision that requires a number of serious considerations to ensure you not only get the best price, but also get through the highly detailed process as smoothly as possible.

One of the very first things you’ll want to do is hire a team of skilled professionals, including an attorney, a CPA and broker to help you navigate the transaction. As this is a major business deal, it’s critical that you hire those with experience and expertise in buying and selling businesses. Look for experts who have credibility and come with excellent recommendations.

Just as you would when selling a home, you want to evaluate the timing and compare prices of similar businesses in your area. Maybe you’ll decide to wait for a more favorable market, or maybe, you’ll want to hurry the sale along to capitalize on a strong market.

Experts advise including important terms in a letter of intent, which is typically offered by the potential buyer to provide an outline of beginning terms. While it is not binding on either party, it is a starting point. You can, and should, request terms you’d like to see in the document., as sometimes these can be overlooked when the time for the final agreement is developed.

Selling a business is typically a lengthy process that requires not only patience, but highly organized information that can be readily accessed by both the seller and buyer. The best advice is to be prepared for a lot of detailed questions. Here, your team of professionals can help guide you, as you examine financial records and other relevant materials.

Another equally important factor to consider is valuation of the businesses’ assets. Unless the transaction is structured as a stock sale, the businesses’ assets are the key means of determining the value. Advisors encourage sellers to be realistic, but carefully examine all assets on their balance sheet, including projects that are in production, even if not yet complete.

Of course, taxes are key to the sale. After-sale taxes should be considered at the outset of your selling process, with the help of your advisors. Representation and warranties insurance should be evaluated to protect you, the seller, from any potential future claims. Sometimes, the buyer may help with those costs.

As the transaction moves forward, your team will work to see how to structure your deal for income tax purposes. Costs should be listed clearly to avoid confusion and it is best, financial experts suggest, to determine whether the cost should be capitalized in the gain/loss column or deductible as a business expense.

State and local taxes should not be overlooked, as they are just as important as your federal taxes resulting from the sale. Payroll and sales taxes must be considered as well.

If you are considering selling your business, reach out to the advisors at Diamond & Associates CPAs. We can provide guidance throughout the entire process.