Selling a business is a very serious transaction. Certain steps should not be overlooked or taken lightly due to the possibility of losses or mistakes. There are a number of factors, especially the large dollar amounts involved, that should encourage an owner to speak with a lawyer before selling.
Orlando business owners will see an average of over $100,000 for their business
According to The Orlando Business Journal, the median sale price for a business transaction in the city was about $130,000. The amount from the previous quarter in the report was $185,000. Most of these businesses also had annual revenues in excess of $300,000 and cash flow of approximately $80,000. Just over 50 business transactions had been made in each of the two most recent quarters in Orlando.
The sectors represented in these sales included manufacturing, retail, restaurants, and other service based industries. The value of businesses in the manufacturing sector was higher than the others, with an average of just over $1 million. As a general rule, businesses in sectors such as services and retail tend to be smaller and bring in less revenue, which accounts for the higher prices in manufacturing. These companies are simply much larger operations all around.
Out of the four major metro areas in Florida, Jacksonville and Orlando had the lowest asking prices for businesses that were for sale. Tampa was in second, and Miami was the highest. These rankings roughly correspond to the cost of living in each area as well.
Why assistance from a lawyer is important before a business sale
With that kind of serious money involved, it is important to invest in legal services as well. There will need to be a formal contract of sale that details the rights and responsibilities of both the buyer and the seller. There may be taxation issues that need to be clearly defined and agreed to by both sides as the buyer assumes the liabilities of the seller. A company may also hold real or intellectual properties which need to be properly transferred. Former employees may even be subject to contracts that do not allow them to work for, or share information with competitors for a certain number of years.
Business transactions can also be categorized as asset sales or equity sales depending on the needs of both parties. Each type of transaction has slightly different legal requirements and may be more beneficial depending on the situations of the buyer and the seller.
Get in touch with a local attorney who can help sell your company
Be sure to get help from an experienced lawyer before selling a business. Legal Counsel P.A. serves Orlando and surrounding areas in Florida with professional advice.