Can I explore selling my business without being sure I want to sell?

Exploring a sale is not the same as committing to one. You can gather information, test your own appetite for selling and still keep the business. BDC, the federal development bank, says being clear on your goals helps you take the right steps to prepare for a transaction that suits you. That clarity is the real purpose of an early look.

Start with steps you can reverse

Talk to your accountant and a lawyer who knows business transitions. BDC describes the accountant’s role as preparing year-end and interim financial statements, projections and other documents that buyers may ask to see. BDC also tells sellers to review their records with an accountant to make sure they are up to date, and that work keeps its value if you decide to stay. A valuation is another option; BDC notes that if your value comes in below expectations, it is an opportunity to look at ways to improve the business.

Be careful about who learns what

Confidentiality is one exposure to manage. BDC warns that, depending on a site’s confidentiality procedures, word could get out to employees, customers or suppliers that you are selling. Before you share financial details with anyone outside your advisors, ask how the information will be protected and whether the other side has signed a confidentiality agreement. BDC’s guidance on acquisitions says that, to pursue discussions with a seller, it is customary to sign a confidentiality agreement and write a letter of intent.

Know when a document changes the picture

A letter of intent is the point to slow down. BDC says it is not intended to be fully binding unless otherwise expressly stipulated, so read which clauses do bind you. It also says a letter of intent can give a buyer a period of exclusivity, which could limit your freedom to talk to others. Have your lawyer review the document before you sign it. BDC adds that thorough preparation is the best way to ensure a smooth transaction, which is a reason to prepare even while you are undecided.

Questions to answer before you go further

• What do you want from a sale: retirement income, a legacy, or a continuing role?
• Who else, such as a partner or family member, has a say in the decision?
• Which employees, customers or suppliers would you tell, and when?
• What would make you stop the process?

If your answers point towards a sale, see what to do first when you are thinking about selling for the next steps.