When selling a business, as in the rest of life, if you don't know what you want you are sure not to find it. Our next several posts will involve balancing all of the factors you must plan for when selling your business. Solving this riddle is the essence of a successful business succession and exit plan.
Knowing what you want involves balancing many competing interests. The first area we will talk about is determining what is fair for the people closest to you.
Spouse:
Most couples have talked about how they will handle the sale of the business for years. In most cases the spouse is fairly straight forward since downstream financial support is usually the main issue.
Children:
One of the most difficult situations is deciding what is fair treatment for your children. Each child has different interests and abilities. Some will work in the business and some may not. Sometimes a child will want to run the business after you retire but just does not have the ability. These are all difficult decisions. They take great soul searching. Each situation is different and depends on the people involved and the underlying business. In the end you must do what you think is right.
Key Employees:
These can make great buyers. If they are not interested in buying their commitment to stay with the business for at least a year or more after a sale can greatly enhance value. You need to think about this and work out something fair to all.
We advise that you start talking about these issues to these key people in your life at least 5 years prior to your projected sale/retirement. By making it clear that you are planning for the somewhat distant future you can begin gauging interest and possible solutions without the upset that an immediate decision "sprung" on people can cause. www.harvestbusiness.com
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2 comments:
I know this is old, but I think this is an interesting article because I need to sell my business. This article is very helpful. I'm aware of the due diligence and things like that, but I don't even know where I could begin to sell my business. I know there are brokers, but do you have any other suggestions? Thanks
Rhonda -- There are a lot of resources you could use, like your local Chamber of Commerce or business brokers.
I recommend checking out BizTrader.com. It's this online global marketplace where you can invest, buy, and sell a business. It's inexpensive (and often free) to use, and if you do decide to use a broker. Check it out and good luck!
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