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New Rules for Selling Your Spa
By: William J. Lynott
Posted: October 26, 2010, from the November 2010 issue of Skin Inc. magazine.
page 5 of 6
“An owner should definitely inform employees about a plan to sell the business,” says Petrecca. “If they find out from anyone other than the owner, they will almost certainly lose their respect and loyalty. That, in turn, could influence prospective buyers.”
The timing and the manner of informing employees are sensitive details. According to Petrecca, “It’s important to respect your employees’ concerns about their futures. Anything you can do to demonstrate your concern for them will help everyone.”
Consider professional help
Obtaining assistance in preparing your seller’s document is not the only reason that you should engage professional help. It is very difficult for the typical business owner to place a realistic price on a business. Using a professional business broker to sell your business is likely to bring the most satisfactory results, including the best net return for the owner.
However, if your business is small—anything under $1 million in annual sales—it may be difficult for you to find a broker. Or, you may be reluctant to pay a broker’s fee, which typically range from 8–10% of the first $1 million, and scale downward after that. If you intend to put your business on the market without the services of a broker, you need, at the very least, a good accountant and a good attorney. Both should be experienced in business sales.
The sale of a business, even a very small business, is a complex transaction rife with potential frustrations and legal pitfalls. Marsh summarizes it this way: “If you’re like the great majority of business sellers, you’ll do the job only once in your lifetime. That means you need to get it done right the first time.”