ELIOT WAGONHEIM: If you personally are looking at leaving, you want to sell your business and buy an RV and travel the country. Well then you have to make sure that your business is in shape so that it can be transferred and it can still fulfill the value without you. If your company is sales oriented and you have got three stellar sales people that are responsible for 75% of your business, have you locked them down to contracts to what we call restrictive covenants meaning covenants not to compete, or non solicitation agreements meaning that if they leave, they cannot take your customers as their own or bring your customers to another competitor. If you haven't the time is well before you actually put your company on the block so that a perspective purchaser coming in can see that the value of his or her investment in your company is protected.
RICHARD BOOTH: What buyers are interested in is not getting any liabilities that they do not understand or that might crop up later and perhaps are not even known.
ELIOT WAGONHEIM: Do you have a strong second tier management? Do you have people besides you who have relationships with your customers?
RICHARD BOOTH: Many times buyers who are worried about the possibility of unknown liabilities, contingent liabilities will simply buy the assets but leave the liabilities of the business, usually the long term liabilities in place.
ELIOT WAGONHEIM: How do you get out? For many people that answer might be to merge with another company or to be acquired by another company.
RICHARD BOOTH: If you want to protect yourself in connection with the sale of the business, you are going to want to sell the stock if it is a corporation. If the company is an LLC you can simply sell your LLC interest.
ELIOT WAGONHEIM: These are things you have to think about long before you contact somebody to sell.