Can you sell your business to a competitor?
One of the most common questions we get asked, is it
possible to sell your business to a competitor? You may be surprised that the
answer is yes, and selling a business to a competitor in Tampa, Florida, is
quite common. It is important to be aware that selling a business to a
competitor is different to selling to a buyer who has no previous experience in
buying businesses. Based on this you need to treat both buyers differently.
A competitor can
actually be a good buyer
Selling your business to a competitor shouldn’t have any
negative connotations. Your competitor can be a great buyer for your business
as they will have experience in your industry. A competitor may also have a
better understanding of the value of your business which can help speed up the
negotiation process.
Do approach the sale
with caution
While a competitor can be a great buyer for your business,
we always advise that you should proceed with caution in the early
negotiations. Sadly, there have been cases when competitors have appeared
interested in buying simply to get hold of inside information. It’s vital that
any information that could give your competitor an advance shouldn’t be
revealed until after the sale and you have the funds in your bank.
Using the services of a business broker when selling a
business is a sensible move, however when selling to a competitor, it is
essential you have a business broker on your side. Your business broker acts as
the indemnity and this will ensure that your business secrets aren’t revealed
until after the sale.
Ensure you are
negotiating from a place of knowledge
A business broker in Tampa, Florida, will help to prove the
value of your business with knowledge and resources. Business broker will help
you to negotiate a price with your competitor. You shouldn’t enter into
negotiations without this valuable information.
Be prepared for some
legal conditions to be attached
When selling your business to a competitor they may ask you
to sign a non-complete form and/or for you to stay on for a set period as
consultant. From the competitor's side this is an understandable move. You
wouldn’t want the person you bought your new business from to set up a similar
business down the street from your after a few months.
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