November 23, 2022
Sometimes, business owners reach a point when they are ready to move on from their businesses. While some are ready to cash in and retire, others are simply looking for a career change. Read on to learn what you should keep in mind before parting ways with your business.
Before you can sell your business you need to consider the business structure. If your business is an LLC or a corporation, then every shareholder and member needs to be in agreement of the sale. If your business is a partnership, your partner must be brought into the conversation. It is important to be meticulous in this step to avoid complications later.
Like most transactions, selling a business will include paying taxes on the sale. It is highly recommended that you contact a tax advisor or certified public accountant (CPA) to discuss the parameters of the sale. Seeking help from a professional is a great way to avoid legal complications later on if mistakes are made or overseen.
To ensure fair compensation, it is critical to get a good grasp on the value of your business before selling. Hiring a consultant or CPA to evaluate your business can be a good idea to get a second opinion on what your business is worth. Look back at your financial records to get a detailed idea of what you have invested in the business up to this point.
Businesses are commonly bought with the help of a loan or small business loan. Keep in mind, it is important to protect your personal and private information when sharing financial records with a potential buyer. You may also want to consider asking them to sign a confidentiality agreement.
The livelihood of your employees should be considered before selling your business. Discuss how the change of ownership will affect employee responsibilities and everyday tasks. Being transparent with your employees about what to expect with the change can help ease anxieties as well.