Co-founder of Blanchard, Krasner & French, Mark Krasner, and partner Abigail G. Stephenson were recently guests on Bosma on Business, a Reno radio show and podcast discussing timely and critical business issues for business owners operating in and around Nevada.
Krasner and Stephenson joined hosts Mike Bosma and Katrina Loftin in a discussion regarding mergers and acquisitions and what companies either selling or acquiring must keep in mind during the respective processes. They also delved into common corporate tax structures and their benefits, along with some important missteps businesses should work to avoid.
Listen to the full show below and view the key points discussed below.
6 Expert Tips on Buying and Selling a Business
Whether you are looking to cash out or acquire a new venture, here is what the experts want you to know:
1. Start Planning 3–5 Years Early The biggest mistake sellers make is waiting until they are ready to retire to start planning. Katrina Loftin advises engaging experts three to five years in advance. This runway allows you to clean up your financials, maximize the value of your books, and fix operational issues that could scare off buyers.
2. Assemble a Specialized Team Your regular business attorney or tax preparer might not be enough. You need specialists who understand the nuances of a transaction. A “Dream Team” should include an M&A advisor to value the business, a transaction attorney to handle the contracts, and a CPA to structure the deal for tax efficiency.
3. Focus on “Cash in Pocket,” Not Just Price Don’t get blinded by a high top-line offer. Mark Krasner warns that a high price with bad terms (like a long-term promissory note) is often worse than a lower, all-cash offer. Always calculate your net proceeds after taxes, fees, and debt payoffs to understand the real value of a deal.
4. Silence is Golden Confidentiality is critical. Announcing a sale too early can cause employees to panic and leave, or customers to jump ship, devaluing your company overnight. Only disclose the sale to key trusted staff (like a CFO) when absolutely necessary, and always use NDAs.
5. Don’t Change the Business During the Sale Once you decide to sell, keep operating as usual. A common pitfall is when owners “take their eye off the ball” or make drastic changes during negotiations. Consistent performance builds trust; erratic changes kill deals.
6. Know What You Are Buying For buyers, due diligence is more than just checking bank statements. You must verify that workers are classified correctly (contractor vs. employee), check for unpaid sales tax liabilities, and ensure intellectual property is properly secured.
You generally only get one chance to sell your business. Leave your ego at the door, hire professionals who know more than you do, and start planning today for the exit you want tomorrow. For additional guidance on mergers and acquisitions, our Business Group can provide exemplary counsel on those and a wide range of business law matters.