Attorneys are known for asking leading questions. This one presumes you will sell your business. And you will. Which begs the follow-up: When? and How? Whether you do it when you want, and on the terms you want, is largely dependent upon your investment in planning. Sovereign Legal Group continues to be very active in legal representation of both buyers and sellers in M&A transactions, including deals ranging from <$1M to $20M+ in 2015 thus far. Here are some key factors to consider when deciding how you’ll sell your company:

Level of Secrecy. Who will you let in on your plans, and when? What's at risk if key employees, customers, or suppliers learn of your plans too soon? And what if the deal doesn’t happen? Who will you need to assemble due diligence information, and will you provide it in a phased approach, only after progressive assurances are received?
Capitalization and Organization of the Company. If you are a single member LLC or single shareholder corp, skip ahead. If not, you need to clearly understand your fiduciary duties to other equity-holders in a transaction, and the steps that should be taken ranging from special meeting notices to the approvals required under applicable law and your organizing docs.
Tax and Wealth Management Analysis. Have you developed some intellectual rigor to inform your financial decisions? Have you modeled different purchase price and deal structure scenarios with your CPAs? What are your current and projected spending levels? How will you invest sale proceeds, and what is your level of risk tolerance? How long will your proceeds, with risk-adjusted returns, sustain your spending needs?
Your Bottom-Line. Have you developed a reason-based purchase price range, taking into account the type of consideration? Are you open to terms (other than cash at closing), i.e. would you accept a portion in a seller note, acquirer stock, or contingent earn-outs? Is your bottom line supported by an objective valuation study? Does your valuation apply market-based principles (comparable companies and transactions, discounted for size and lack of marketability)?
Transition. Are you willing to stay on to ease the transition? Do they want or need you? For how long? In what role, and reporting to whom? Can your ego handle that?
Legacy and Culture. Do you have specific “legacy” criteria? (Preserving the company brand, jobs for employees, community reputation.) And how important is that to you?

Types of Sale Processes

At the left end of the spectrum is a “narrow” process, an extreme (but common) example of which is responding to an unsolicited offer and entering into an exclusive LOI to attempt to conclude the deal. At the right end of the spectrum is a “broad” process. The extreme example here is an “auction” process run confidentially by an investment banker or similar intermediary firm. Most often we encounter transactions somewhere in the middle: a structured process run by a professional intermediary, but one which carefully selects a limited number (5-15) of “pre-qualified” potential purchasers to be contacted in order to confirm valuation and preserve negotiating leverage.

Business Sale: Process Spectrum

Narrow	Parties Contacted	Broad
Lower	Seller’s Negotiating Leverage	Higher
Higher	Confidentiality of Process	Lower
Lower	Likelihood of Deal Consummation	Higher
Higher	Potential for Business Interruption	Lower

Typical Scenarios

1-on-1 Negotiation	Targeted Process	Broad Auction
Unsolicited offer from competitor, key supplier, management	Management or intermediary identifies and contacts 5-15 parties.	Intermediary identifies and contacts 15-30 strategic and financial parties.