Building a business is hard work. So, it's natural that there may come a time when you want to sit back, relax, and enjoy the fruits of your labor by selling your business. Unfortunately, selling a business isn't easy, either. But like anything that's hard in life, planning can help make things a lot easier.
As you start thinking about your plans, it's critical to consider some important questions:
- Why do you want to sell? Maybe you love your business and it brings you great happiness, but you no longer want to work the long hours it takes to run it. In that case, selling your business might not be the best solution. It could be that you need to hire additional help or create a management team so you can delegate some of your responsibilities and cut back your hours. Think carefully about your selling motivation before you move forward.
- What will you do after you sell? The idea of not having to work long hours might be appealing, but how will you replace the time you spend at work? Will you see if you can stay on in some role at the company? Volunteer your time? Or travel? The transition period will be much easier if you know exactly what you're going to do.
- Is your business ready for sale? To determine that, you'll need to take an honest assessment of your business. You can start by gathering financial statements and tax returns for the past several years. You should also run some projections for the next 3-5 years and assess the strengths and weaknesses of your business. A buyer will want to take a deep dive into your financials and gathering the information now will make the process easier.
- How much is your business worth? Your business is worth a lot to you, but do you know its actual value? Having a business valuation done on your business by a professional will help you get an unbiased assessment of the market value of your business. The business valuation will address factors that add and detract from the value of your business.
- Who will help you sell it? As a business owner, you're used to doing things yourself. But selling a business and getting the value you seek requires having a team of professionals who specialize in succession. That team could include a business broker to help you find buyers, a CPA, an attorney, as well as a financial planner who can help you manage your nest egg.
It's exciting to think about capitalizing on the fruits of all your hard work someday, but selling your business will have a major impact on your personal life. With proper planning and the right team of professionals, you can help ensure it's the right move for you.