Selling Your Business – It’s Not Just about the Money

Selling a business that you’ve worked hard to create, grow and maintain is a very difficult decision.  At some point, every owner thinks about the possibility of a sale. As the end of the year approaches, many of us may be asking ourselves if this is the time to make a change. The thought of reaping the benefits of your investment can be very attractive.  But the reality is that money is only one piece of a very complicated puzzle.   Perhaps you’re considering retirement, or moving on to a bigger and better business idea that has caught your attention.  Whatever the reason, when you start the thought process, we suggest business owners consider a number of questions that will give you a 360º view.

Motivation

What are my reasons for selling the business? 

How do I know if the business is READY to sell?

What role will my family and I have in the business post sale – if any?

Pricing/Value

How do my reasons for sale impact how I price it?

What are the most important terms that I need to negotiate into the sale?

What is the maximum value of my company in the open market?

How much of the purchase price do I need in cash?

Would I consider an earnout, or an IPO?

Would I consider owner financing if I found the “right” buyer?

Marketing/Sales

How do I locate appropriate buyers? 

Do I need a business broker?

How do I best position my business so that it appears attractive in the market?

Timing/Advice

What is the timing needed to make an effective sale?

What advisors do I need (lawyer, accountant, financial advisor, investment banker)?

In what order do I need to engage them?

Structuring the Deal

Do I need to look into seller financing?

What other details do I need to include in structuring the deal?

Am I selling all the assets or stock or a combination?

What are the tax implications of selling?

What’s Next?

A really important consideration before moving in the direction of a sale is to answer this:  What is your game plan after the sale is complete?  It’s hard to let go of something you’ve worked so hard to build.  For many of us, building a business is in the blood!  In order to get everything (not just money) that you want out of the sale, planning for “life after the sale” is crucial. It may help to go back and re-examine your initial motivations for selling the business.  It may be even more beneficial to talk with other business owners who have already been through it.  Find out what selling a business is really like before taking the plunge.

We have participated in many purchases and sales of businesses over the years.  There is no replacement for a conversation with people who have gone through the process successfully.  Give us a call – we are happy to have a conversation about what it takes for a successful sale – including preparing the business for sale, and how to plan for life after the sale.

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