One day something went wrong. Now you want to sell your business.

December 31, 2009

Okay, so you made a mistake.  Does that mean you can not sell your business?  Not necessarily.

Remember the Tylenol scare?  Something went wrong at Johnson and Johnson but they handled it right.  Today Johnson and Johnson could be sold, and is every day, in spite of the tainted Tylenol.  Likely as a result of that terrible incident, they are a safer organization for their staff, their clients, and their stockholders.

Of course the more time that goes by after something bad happens the better.  But, short of that, these are some of the things you can have in place to help prevent and, at a minimum, mitigate the damages.

As you are preparing to sell your business (actually ALWAYS), pay particular attention to these recommendations:  Have policies and procedures that protect clients, staff, and other assets.  Follow the rules of OSHA.  Work constantly to have a safe environment inside and out. Don’t do things you and your staff don’t know how to do.  Use experts when you are uncertain.  Know the source and content of your materials and products.  Monitor and react with a clear head when something goes wrong.

When IT does go wrong use your policies and procedures to guide you.  Keep track of the actions you take.  Seek assistance.  Notify the right people. Don’t back away from the truth.  Offer remedy.  Review and revise the policies and procedures to do better in the future.

When the business buyer looks at your business, they are likely to find the truth at least as the press reported it.  Make sure your actions, records, and situation management can put the buyer at ease.  Know in advance if any liens exist or outstanding legal issues remain unresolved and take care of them if they do.

In small business sales, the transactions are asset sales with no liabilities coming with them.  However, the smart buyer will do searches and want issues that can impact them to be taken care of.  If there are too many messy issues in the past, or ones that are not honorably cleaned up,  the deal could fall apart.

Be wise buyer and seller.

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