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Written By Carson Bomar

Published February 4, 2025

Updated February 4, 2025

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Table of Contents

How to Sell Part of Your Business

Consider selling part of your business as a business owner to smooth the operation process, get money to cover debts, lighten your burden in management, or fuel your long-term strategies for growth. Partial selling of your business is a significant decision that may be necessary in the shifting sands of business. 

Key Takeaways

  1. Before selling a part of your business, your books must be spot on, the legal issues sorted, and your contracts updated. This will help you find the right buyers because clear documentation is essential to showing your stability in operations, making the process easy for all concerned.
  2. Strategic Partnerships make buyers very confident to invest in a business that doesn’t necessarily have to do with the owner being around every second. 
  3. Bringing in experts in law, accounting, and business helps you navigate the tricky parts of selling a portion of your business. They’ll help structure the deal, handle any legal issues, and optimize the finances for everyone concerned.

Types of Partial Business Sales 

When selling a business, you typically consider two types: an asset sale and a share sale. The big difference is that a share sale is generally the usual way of selling the entire business, whereas an asset sale involves selling a percentage of the business.

  1. Equity or Asset Sale: You sell partial ownership in your company to someone else-usually an investor or partner-in exchange for cash.
  2. Department or Division Sale: You would actually sell off a part of your business, such as a product line, subsidiary, etc., and gain the benefit of focusing on those things that you are most good at.
  3. Joint Venture: This means you partner up with another company to manage a new project, allowing the merging of strengths and resources to benefit everyone involved.

Marketing Your Business Sale 

Selling a business begins with creating a compelling, attractive profile that highlights your company’s distinguishing features, such as its background, operation method, and development prospects. This profile is essential for attracting serious buyers. Of course, organizing financial documentation, including tax records, profit and loss statements, and balance sheets, is also necessary. These papers will help gain buyers’ confidence by portraying a realistic picture of your company’s financials. Also, when you put up listings on websites, ensure that you mention all the essential highlights that a buyer looks for in your listing, such as your asking price, profit, and location. 

Negotiation Process For Business Sale 

The negotiation and selling process is crucial when selling a business. It all starts with determining the fair market value of your company, which is its financial health, profitability, and growth potential. A reasonable and exact valuation not only helps you quote a competitive price for your business but also establishes trust with potential buyers.

Then comes due diligence expectation, which is quite significant. The buyers will go into your financial records, legal documents, operations, and assets to make sure that the business is solid and worth the price. Vendors should be prepared for due diligence by organizing their tax records, contracts, and operational information in order to move the process smoothly without hitches.

Once due diligence has been completed, the structuring of the sale agreement can be focused on. This agreement outlines fundamental information such as the amount of purchase, payment schedules, and responsibility during the transition. It also states the nature of the sale as an asset or entity, one that has a bearing on taxes and liabilities.

Finally, you will arrive at the closing of the transaction, which is the very end, when everything is completed and ownership has changed hands. A trouble-free closing means smooth cooperation with legal and financial counselors to overcome various regulatory and contractual obstacles.

 

Strategic Partnerships

The decision to sell a stake in your business usually has a foundation of strategy. It may generate immense value while creating a new source of capital or attracting active partners in the company to drive new highs.

Strategic partnerships, such as selling a portion or a stake in your business, offer new opportunities for growth, reduce risk, and attract capital for further expansion. To explore such partnerships, you need to find a partner who shares your vision for the long-term success of the business. Selling a part may also broaden your ownership structure, reduce personal liabilities, and position your business for further growth.

How to Sell a Percentage of Your Business 

Partial sales of your business may be a new way to revisit the growth projections that are still to be achieved while allowing you to retain control. Success may demand substantial preparation, primarily from legal and financial aspects. 

It’s also a good idea to document your operational processes and build a solid management team. This can make your business more attractive by showing that it can run smoothly independently.

Feel free to consult with experienced lawyers, accountants, and business advisors who can help you navigate the tricky parts of a partial sale and achieve the best outcome.

FAQs

  1. What is it called when you sell a part of your business?

Selling part of your company may bear different names, depending on how a deal is structured. You may have come across various terms, such as selling an equity stake, undergoing recapitalization, or creating a spin-off to sell a particular business unit.

  1. How should I get ready for a partial sale?

When preparing to sell part of your business, you should organize your finances, document your processes, and resolve any legal issues. Professional advisers, such as lawyers and accountants, will undoubtedly help you during this preparation phase.

  1. What are the benefits of selling part of your business?  

Selling part of your business may bring in expansion money, reduce some personal financial risks, and introduce strategic partners who add value. However, you still retain some ownership and control and can use those resources to help your business grow.

  1. How does selling part of my business impact my long-term goals?

A partial sale might actually help you meet your long-term goals by introducing partners who facilitate growth or diversification plans. It is vital to structure the deal appropriately so that this partnership will benefit your business in the future.

Bottom Line 

From the recap of key steps in selling part of a business, we see the importance of professional guidance. Selling off a portion of your company might be quite a deal for some business owners, but WebsiteClosers.com has you covered. 

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