Why You Should Include A Non-Competition Agreement When You Sell Your Business
When you're trying to sell your business, there are a number of things that you want to do to make this entity more appealing to prospective buyers. Even though you shouldn't necessarily be in a rush to sell, you likely want to complete the transaction in a timely manner. One smart move is to include a non-competition agreement — which any business attorney can draft up for you — with the sale of your business. This legal agreement shows that you will not be starting up a new business to compete in the same industry as the business that you're trying to sell. Here are some reasons that including this agreement in the sale of your business is a smart move.
There Will Be More Prospective Buyers
A lot of people who are interested in buying a business will want to know what the owner is doing next. If the owner has a stellar reputation in the community and chooses to open a business that falls within the same industry, a lot of his or her clients/customers will support that new venture — leaving the old business and its new owner facing a lot of challenges. When you advertise that you're including a non-competition agreement when you sell your business, there should be more people who are serious about purchasing the business because they know that they'll have a better chance of success in running the venture.
You May Be Able To Sell It For More
You always want to get top dollar for your business, so thinking about the steps that you can take to help you ask for more money is a good idea. Signing a non-competition agreement can definitely allow you to ask for — and get — more money for your business. The new owner will know that he or she has a better chance to make money with you no longer operating within the industry, and this may prompt him or her to agree to buy the business for a higher sum.
It Can Be Good For You
Making a clean break from a business is often something that is hard for people to do — especially if they built the business from the ground up. You could sell the business, but then look at how it's being run and feel as though the new owner isn't effectively serving your former clients/customers. This could be upsetting to you, and perhaps have you evaluating whether you should start a new business within the industry. When you sign a non-competition agreement, it allows you to make a cleaner break from the business and look ahead to new ventures, rather than look back.