Selling Your Product Business

You may think that selling your product business is the same as selling the service business; however, there are definite differences that you have to think about when drawing up the agreement.

We will be looking specifically at the sale of a product business to help you differentiate the two. First in a product business are you doing the manufacturing, distributing, or the sales portion? If you manufacture the goods being sold then you want the new owners to continue with the quality of the manufacturing your company is reputed to have. In other words you want to make sure the potential owner knows what they are doing and will not change your patent or intellectual property.

Distribution is a little easier. In a product business that distributes the products there is a lot of room for potential growth, even abroad. You are usually selling your clients list, system, and the accounts that go with the business. In this type of business you want your retail shops to still get the goods they need at a good price, but there is also potential for the new buyer to expand.

If you are selling the products in a retail store or other style store then you have inventory concerns, as well as the sale of the business system, space, and accounts. The most typical sale of a product store is this last type. Most of the time individuals sell their products along with their business model. Small to midsized business sales are very popular. There are some potential issues in any of these three sales though.

The quality, the distribution, and inventory can all be modified that will cause the loss of customers for the new owner. You have a proven model that works and that is what you are selling. You need to explain your model and offer help to the potential buyer so that they understand where you are coming from. It will help the transition be a little easier.

You will need to decide if you are selling all of the inventory you have along with items for display. If you have property you will want to consider leasing or selling it to the new owners. The less disruptive the sale the better your customers and employees will handle it.

It is best in any business sale to have a transfer business agent on your side to help market and perform the sale. With help of advisors you can ensure that certain parameters go into the agreement. You may have one contingency stating that certain employees cannot be let go with the new ownership. You may also state that you will be on hand for the transition to help the employees and new owner find an agreement they can all live with. Selling the business is not quick but slow if you want it to succeed after the sale.