If you’re like most entrepreneurs, you likely decided to become a business owner based on a decision to create a certain lifestyle and / or to provide a steady cash flow for many years to come. But have you built your business to sell?
Building a business to sell doesn’t necessarily mean you intend to sell in the near future. It means you have positioned your business in a way that it could sell for an optimal value in the event selling begins to makes sense.
I find that most business owners have done little to no preparation to sell when they first reach out to me. Many hadn’t intended on selling now, or even at all. As with all things in life, you never know how or why your circumstances will change.
Here’s what you need to know…
- What is your business worth today and how is the value determined? Arming yourself with this knowledge is a must! You probably have a general idea of how much your home is worth, right? What about your business?
- What characteristics will make your business attractive to potential buyers? Are there tweaks in your business model that can add to the value?
- What are the tax consequences of selling? In what ways can you spread out the taxes over time?
Creating an Exit Strategy can cost you little to nothing at all…
If you’re still thinking, “I’m probably never going to sell my business.” What if you’re wrong? Wouldn’t you like to be in a position where you have the resources in place in the event things change?
Here’s what you can do…
-Contact an Accountant who is knowledgeable about tax strategies for selling a business. *Not all Accountants are.
-Reach out to a Business Broker who is familiar in valuing businesses like yours. Find out what types of buyers would be ideal to target and which characteristics could make your business more or less valuable.
-Ask a Lawyer how to protect yourself legally in the event you decide to sell. Would it make more sense to sell the assets of your company or the entity as well?
Did you know…
A Mass Mutual survey conducted on August 31, 2015 found that only 41% of business owners have any type of succession plan. A high number of these succession plans involve the idea of handing down the business to their children. Interestingly, only 23% of the people surveyed acknowledged that their chosen successors were even aware that they are the successor.
To learn more about how you can implement a sound exit strategy, feel free to contact me. I offer free and confidential business valuations.
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