Avoid the temptation to be a superhero. If you want to sell your business, you will require expert knowledge in many areas. Sellers who try to do it all are sellers that mess up big time.
Your business is likely all or part of your nest egg. Hiring experts and getting advice from others you trust will save you frustration and money. Get rid of the idea that advisors aren’t worth the money. In most cases, they are not only worth what you pay, they can save you money and help you to sell your business successfully. But be wary of free advice unless you know it’s coming from a knowledgeable source.
The Decision to Sell
Are you really, really ready to sell your business? This is the first, and most important, decision you will make. Have you thought it through completely or are you just thinking of selling because you’ve had a bad day or two? Do you know what you’re going to do after the sale? Will you have enough money to retire? What about the impact on your family and employees?
Your Team – Part 1
Other people may be impacted by your decision to sell your business. You may want to consult with your spouse, your children, business partners or associates and close friends. They may point out things you never considered.
How Much is Enough?
O.K., you absolutely, positively know you want to sell your business and nothing’s going to change your mind. But there’s one more step you need to take before you get too pumped up – determining how much money you want or need and whether getting it is realistic.
Your Team – Part 2
If you’re thinking of retirement, now is the time to talk to your financial advisor, if you haven’t done so already, about your future needs.
This is also the time to get a valuation of your business. Depending on the size of your business, you may use a business broker, your accountant or a certified valuation expert. The benefits of the latter are that your price will be more defensible to buyers and possibly even the tax authorities.
But knowing the value of your business is only the first part. What’s more important is how much you’ll get to keep after tax. This is where your tax expert comes in. And no, your present accountant may not be the best person for the job.
If you’re planning on using your accountant, make sure that he or she specializes in tax planning and the sale of businesses. Not only will you get a more informed opinion, a tax specialist may be able to suggest ways of minimizing the tax bite. Some of these strategies may take some time to implement so don’t procrastinate on this step.
Hopefully, the news is good and you’re ready for the next step. If you’re disappointed with how much you might get, your best option might be to spend some time increasing the value of the business and planning to sell your business when you can get what you want.
What Else Do You Want?
You now need to answer some questions about the sale that are important to you, such as:
- What exactly are you selling? Shares or assets? Which assets will be transferred? Which liabilities can be assumed?
- Do you want all cash (doesn’t everyone?) or are you prepared to offer seller financing? Bear in mind that you will likely get a higher price if you are prepared to finance part of the deal.
- How long are you willing to stay involved? Will you provide some simple training or are you willing to stay on in a management capacity for a longer period? Again, you’ll get more if you’re willing to stick around after the deal.
- Are there family members in the business? What are their requirements?
- How do you expect the buyer to handle your employees? If you have some long-term employees, you may want them to be well looked after.
Take your time and make sure of your priorities. Make a list and get some feedback from people you know and trust.
Your Team – Part 3
Here is where your lawyer will come in handy. Just as with your tax expert, don’t make the mistake of using a lawyer who is inexperienced in the sale of businesses. A lawyer who focuses on real estate transactions, for example, won't be familiar enough with all the considerations of a business sale.
An experienced lawyer will help you define your requirements and tell you what you will need to consider when specifying terms and conditions.
Another valuable service that your lawyer can provide is a legal audit – an examination of all contracts, agreements and corporate documents and an assessment of potential legal liability in a number of areas.
How and When to Sell Your Business?
When is the best time to sell your business? There are many factors, the most important of which might be how eager you are. Generally, the best time to sell your business is when it’s been on an upswing for several years. Another consideration is the amount of time required to prepare the business for sale. But if you just can’t wait to get out, obviously now is the best time.
The more time you give yourself to plan the sale, the more opportunity you’ll have to increase the value of your business, implement tax strategies and improve your business physically, financially and operationally.
Your Team – Part 4
You will eventually need a business broker to sell your business, unless you are planning to sell it on your own. There are situations where you might be the best person for the job but, in most cases, sellers benefit through professional representation.
Related: find nearby brokers with the Pitch-to-Brokers tool
Even though you’re not ready to hire a business broker, it’s still a good idea to start the hunt and find out what they can and will do for you. Are they simply marketers or do they provide other services that can help you get your business ready for sale?
The business selling process is not a piece of cake since you must take into account many different things from clear understanding that you’re ready to sell everything to painstaking and long-term proceeding.
So you need a team of professionals who could help you avoid undesirable problems. In this case, you should pay attention to hiring such employees as financial advisors, valuation experts, tax experts, lawyers, and business brokers.
About the author: Rebecca Carter is one of the dissertation writers at research paper writing service UKessays. Besides, she is fond of traveling. In this case, she has visited a lot of countries all around the world. It should be noted that photography is her other passion. Some years ago she was providing some bloggers with wonderful pictures.