The best time to sell your business is when your profitability, sustainable growth, and management team are all performing at a high level. However, retirement and burnout are the top two reasons people decide to sell their business. If any of these situations describe you, it may be time to consider selling, family succession, or transitioning out of the ownership role. (more) Selling your business is a financial and emotional task that demands a great deal of consideration before beginning. Ask yourself…
“What will I do after selling my business?”
- The more time you’re currently spending in your business, the more challenging it may be to transition out, following the sale of your business.
- If you’re ready for less financial risk but still love working, you might consider a Recapitalization that lets you keep a portion of the business and continue building it with a Private Equity Group. You can still run the business with additional resources of the Private Equity Group, while greatly reducing your financial risk.
- If you’re ready to sell but are concerned about a large amount of suddenly empty time, you might want to rediscover hobbies you set aside or explore nonprofit organizations/programs that could benefit from your experience and availability. You might even decide to buy or start another business.
“Who will I be without my business?”
Depending on your situation, selling your business might cause feelings of loss or relief. I sold my previous business 15 years ago. While I still miss my business, I know I made the right decision for my business, my family, and my future. Since then, I discovered a new identity and a new, fulfilling sense of purpose. To find that new purpose took time, faith, and a plan. My advice to people selling their business is to stay active, and don’t give up.
“How can I ensure that my legacy continues?”
Maintaining your legacy within your business, industry, and community may be negotiated during the sale of your business. Options for legacy maintenance could include continuing your support of the community and/or your involvement in industry associations.
“What are my financial goals for selling my business?”
One of the most difficult yet most crucial parts of selling a business is managing your own expectations. The value you believe your business is worth may or may not be realistic.
The first step in setting your expectations is to have a market-based estimate of value (EOV) completed. The second step is to work with your accountant to understand the estimated net proceeds of the sale of your business. The third step is to work with your financial advisor and possibly an additional financial advisor to understand the feasibility of selling your business. If there is a gap in the money needed from the sale of your business and what your net proceeds may be, you may need to keep your business for a period of time while building additional value into your company.