Ensuring Safety In Transfers

 Julie Delong, COO of Backyard Bookkeeper, was recently featured in an article written by the Forbes Finance Council.  You can find the original article on the  Forbes Finance Council website along with Additional Published Content by Julie DeLong.  Below you will find a summary of the article.  

15 Options For Ensuring Safety In Business Transfers

Forbes Finance Council members offer valuable insights into ensuring a secure and smooth transition during the process of selling a business. With an emphasis on protecting interests and assets, these 15 recommendations provide guidance for both first-time sellers and seasoned entrepreneurs:

1. #1 – Seek Guidance:

2. Enlist the support of experts, such as attorneys and tax professionals. Tailor agreements to your interests and understand the true value of your company in the market. – Puai Wichman, Ora Partners

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4. #2 – Make Your Outcomes Known:

5. Work with a qualified attorney experienced in the industry to protect your interests. Clearly communicate your desired outcomes, and be willing to walk away if necessary. – Julie DeLong, Backyard Bookkeeper

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7. #3 – Establish Legal Agreements:

8. Have a comprehensive legal agreement in place, clearly outlining sale terms, warranties, liabilities, and post-sale obligations. Conduct due diligence on potential buyers. – Greg Cucino, Roundtable Strategy Advisors

9. #4 – Specify Objectives:

10. Clearly define primary objectives, such as maximizing financials or bringing on a growth partner. Avoid complications during the due diligence process. – Drew Gurley, Redbird Advisors

11. #5 – Utilize Insurance:

12. Implement tools like buy-sell insurance policies to protect the owner and the business. In case of death during the sale, providing an added layer of security. – Letitia Berbaum, The Zandbergen Group

13. #6 – Secure Assets:

14. Create a Cook Islands Asset Protection Trust and open a Swiss bank account to secure assets after selling the business, protecting against potential mismanagement by the new owner. – Blake Harris, Blake Harris Law

15. #7 – Employ Opportunities:

16. Safeguard yourself through a sale agreement that incorporates non-disclosure agreements, non-compete clauses, clear intellectual property ownership, indemnification clauses, earnout provisions, and professional assistance. – Bilal Surahyo, Simpli Home

17. #8 – Avoid Financing:

18. Avoid selling with financing, especially if leaving the business. Ensure sufficient cash upfront and prevent reliance on the business’s future success for note repayment. – Chris Tierney, Moore Colson CPAs and Advisors

19. #9 – Structure Transactions:

20. Structure deals as stock sales rather than asset sales to shift liabilities to the buyer. Working with an industry-specialized attorney to ensure a secure structure and reasonable earnout targets. – John Abusaid, Halbert Hargrove

21. #10 – Support Transition:

22. Offer post-sale support and maintain a transition period to provide training. Ensure a smooth handover of operations, reducing the risk of misunderstandings or disruptions. – Jose Rodriguez, Got Credit?

23. #11 – Be Diligent:

24. Engage in meticulous due diligence regarding prospective buyers’ financial stability, reputation, and past performance to facilitate a seamless transition and minimize potential hazards. – Jeffrey Bartel, Hamptons Group, LLC

25. #12 – Consider Consequences:

26. Consider the personal impact of the sale on your family, emotions, and long-term aspirations. Address personal questions alongside financial and agreement-focused aspects. – Brian Lasher, CIG Capital Advisors

27. #13 – Perform Analysis:

28. Conduct due diligence on recent comparable company transactions. Determine an appropriate buyout multiple and arming yourself with data to support sale price negotiations. – Luke Andriuk, Saugatuck Financial

29. #14 – Obtain Rights:

30. Hire a lawyer to ensure clear ownership and usage rights in the sales agreement. Protect intellectual property, trademarks, and other valuable assets. – Nick Chandi, ForwardAI

31. #15 – Remain Transparent:

32. Be completely transparent during the sale process to prevent potential backlash from the new owner discovering overlooked issues in due diligence. Transparency helps avoid future problems. – Todd Sixt, Strait & Sound Wealth Management LLC