If you are getting up in years and are starting to look into retirement, one of the things you have to consider is how to handle your business. Will you sell it to someone outside of your family? Will you pass it on as a kind of inheritance? Do you want to keep running it but start training someone in the business to take over?
These are all great questions. If you decide that you want to sell your business, you will need to get a valuation, which is one of the only ways to know the true value of your business and what to expect if you want to sell it. Here are a few steps that can help you prepare for selling a business, so you can move forward with the additional financial security from that sale.
Ready to sell your business?
If you’re ready to sell, the first thing you have to do is get a valuation. This will look at your liabilities and assets to determine the true value of your business as it stands today. You can also consider looking at similar businesses to see what they’re selling for to decide if you want to sell in the same range.
Along with the value, the next thing to consider is what the business is worth over time. Will it bring in $500,000 a year for the foreseeable future? Will it start to see a decline in business? That might play a role in how much money you can ask for when you start looking for prospective buyers.
Once you find a potential buyer, you’ll want to have a succession plan in place to keep that business running smoothly. Many buyers will want to at least learn about the business a bit more and get some guidance on how to run it. You might offer training, for example, or work with the person who wants to buy it for a year or two before completing the sale.
Finally, once you’re ready to move on, know that you should talk to your attorney and financial advisor about your cash and how to invest and protect it moving forward.