Want to sell your business?Know how to do it!
Selling a business is a complex venture that involves several considerations. It can require that you enlist a broker, accountant and an attorney as you proceed. Whether you profit will depend on the reason for the sale, the timing of the sale, the strength of the business’s operation and its structure. During a sale, business owners have key financial and emotional considerations, like figuring out what to do once they don’t own that business and developing a personal financial plan. While the lump sum from a sale can be life-changing money. Reviewing these considerations can help you build a solid plan and make negotiations a success.
1. Why do you Sale
You’ve decided to sell your business. Why? That’s one of the first questions a potential buyer will ask. Owners commonly sell their businesses for any of the following reasons:
- l Retirement
- l Partnership disputes
- l Illness and death
- l Becoming overworked
- l Boredom
Some owners consider selling the business when it is not profitable, but this can make it harder to attract buyers. Consider the business’s ability to sell, its readiness and your timing. There are many attributes that can make your business appear more attractive, including:
Consistent income figures
A strong customer base
A major contract that spans several years
2. Business Valuation
Leaving a business requires understanding the business’s value and worth. You may need multiple valuations depending on the buyer, nature of the business and the deal.It’s important to determine the worth of your business to make sure you don’t price it too high or too low. Locate a business appraiser to get a valuation. The appraiser will draw up a detailed explanation of the business’s worth. The document will bring credibility to the asking price and can serve as a gauge for your listing price.
3.Finding a potential buyer
Buyers can be anywhere.Many companies are sold to key employees since these people know and understand the business and have a passion for it.A business sale may take between six months and two years according to SCORE, a nonprofit association for entrepreneurs and partner of the U.S. Small Business Administration. Finding the right buyer can be a challenge. Try not to limit your advertising, and you’ll attract more potential buyers
4.Create a plan for Handling the Profits
What you plan to do with your time and how your life will look is as important as the financial aspect of leaving your business.Take some time, at least few months, before spending the profits from the sale. Create a plan outlining your financial goals, and learn about any tax consequences associated with the sudden wealth.Do some analysis to figure out how much of the proceeds you should set aside for retirement, and with the balance of the proceeds, think about how much you can risk for the next deal.
Speak with a financial professional to determine how you want to invest the money and focus on long-term benefits, such as getting out of debt and saving for retirement. Accountants, lawyers and investment bankers can help shepherd your company through a sale, and a personal accountant and attorney can assist with your personal financial planning when you do receive that sum of money.
If you don’t have a plan, rediscover strengths and build your network to make a transition into something new easier. Be sure to budget for these expenses, since just rolling with it often doesn’t work.
If you surround yourself with capable people with different strengths and weaknesses, you can get aro