Quote:
Originally Posted by shamarkaleo
Hi Web Gurus,
I'd like to chat with anyone here who has successfully sold a web design firm in the past.
We have a design firm with five staff and 50+ clients, and we're planning to sell.
We've sent inquiries out to several design firms that we think would be a good match for our client's needs, and two have expressed interest.
But what are the legalities, here? What are the issues we need to consider with a sale/merger?
How do you price the sale of a company like this? How do you handle the transition of power? Are non-competes required when you sell your company to another company? (Meaning, you cannot design in the same niche for the next ----- years?)
Are you required to include company equipment in the sale (computers, etc.), or just the client list?
How do you ensure a positive transition for everyone involved?
I'd love to hear your thoughts,
Kelli
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All of that is negotiable.... LOL
But If your actually selling an incoporated company lock stock and barrel.
It is not just the client lists,
1) it is the rights to the contracts, the trademarks, copyrights, patents and work product.
2) your non-compete is required for a period time. (and definately no contact with your existing client base except through the new ownership will be allowed)
3) usually you need to serve in the new firm for a period of time to service the clients
and help the buying firm figure out you operations.
4) All equipment.
5) Your losses/tax debt (WHICH THEY WILL USE TO REDUCE OR INCREASE THERE OWN TAX BURDEN)
THOSE ARE THE MAIN THINGS
BUT NOTE THEY ARE ALL NEGOTIABLE!!!!
Look you run a business already.. Brokers, Lawyers and CPAs who you have not dealt with before are just in it for a slice.
If you have an existing Lawyer and CPA they should be able to get the financial details for you and read the legalease on any contract you want to sign.
Just hammer out your details with your perspective buyers (no lawyers in the room), After you have the list of points, have thme right up the contract
and then do not sign anything till you go over the contract specifics with your lawyer and CPA.
MOST IMPORTANT!!!!!!!!!!! Do not tell your employees you are selling till you know it is a signed deal...
If the deal does not go through (and that means untill it is signed and noterized) you do not want to lose employees, or clients to get wind of a change.
It could devastate your business if employees or clients are unhappy or look to leave!!!!!!!!!!!!
Finally understand that it may never be a positive transition for everyone. But it has to be for you since you will be out of the business!