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When someone passes on their cigar business to a child or long-time partner or employee, both parties usually enjoy a shared understanding of how the company works, what it means to the founder, and what the seller needs the transaction to accomplish. Selling the business to an external buyer requires a little more preparation.
Whether you’re moving on to a new venture or ready to retire, seeing to a few tasks before selling your business to a new caretaker can make the process a lot easier.
Task #1: Figure Out What You Need From the Sale
Being clear on the ways the sale of your cigar business will impact your life going forward will help you set up the right kind of transaction for your needs.
If you’re a tobacco farmer at long last planning to retire, for instance, you might want to set up the sale on an installment plan, since that would guarantee you a steady income from the concern well into the future — and could mean a higher sales price and nice tax benefits. If you’re letting go of your cigar manufacturing shop so you can open a bespoke cigar retail outlet, you’ll probably want the cash right up front.
Task #2: Get Your Documents in Order
Getting any kind of business ready for sale involves gathering together financial statements, tax returns, and up-to-date inventories. Companies in the tobacco industry have additional documents they’ll need to make available, including all of their applicable licenses or certifications (like a tobacco retailer’s license, for example). Due diligence for any responsible potential buyer of your business is going to include a thorough assessment of your company’s compliance with federal, state, and local tobacco industry regulations.
Task #3: Pick Your Sell-By Date
Any business owner planning a sale will need to map out a time frame that works them, whether they’re looking to retire for good or pursue a new venture. But, again, given the degree to which businesses in the cigar industry face existing, proposed, and looming regulations, owners in this arena have additional considerations to factor into the calculus.
The owner of a cigar lounge in a town with a newly passed ordinance limiting the amount of time customers can smoke in establishments like theirs will have to decide whether it’s worth it to try to rush a sale before the ordinance goes into effect or take their time and sell the company with the new rule in place. If local opposition to the new rule seems strong and there’s an election coming up, that, too, could play a role.
Task #4: Consult a Cigar-Industry Savvy Legal Advisor
The cigar industry occupies a unique niche in the business world. Whether you’re a farmer, processor, wholesaler, distributor, or retailer, you’re always navigating various, sometimes overlapping, rules and regulations and specialized networks. An attorney who understands this particular landscape can help see you through the sale of your business to an external buyer, no matter where you are in the process. To learn more, contact Venerable Law at 813-680-4530.
