If the time has come for you to sell the business you’ve spent countless hours growing into a successful operation, create a transition plan to ensure the legacy of your hard work.
The questions below should be considered by any business owner before retiring in order to transition in new owners, instill confidence among employees and help maintain consistent operational performance.
How much profit will you receive? Consider hiring a business appraiser to get a detailed valuation of your business to help prevent you from underselling. Getting a fair price for your business can help pad your saving accounts and Social Security for a more financially stable retirement.
Who is buying your company? If the legacy of your business is important, you’ll likely want a buyer who aligns with your company goals and vision. No matter who you sell to, make sure they have the business acumen to complete the sale.
How long will you stay on after the sale? Oftentimes, owners stay on for a predetermined time in training or consulting roles. The transition period could be a few weeks to a year or more depending on your exit goals. If you want to sell but aren’t ready to step away completely, you can negotiate with the new owners to stay on until you’re ready to fully retire.
When will you sell your business? Timing can make a tremendous difference in the valuation of your business, as well as help line up potential buyers. Considerations about when to sell your business include peak seasons for your industry, consumer demand, competitor expansion and the health of regional and national economies.
How will a sale affect your partners? There are a host of legal implications regarding the sale of businesses owned by multiple partners. Ideally, co-owners have negotiated a buy-sell or operational agreement that dictates the terms of a sale or buyout. Also consider receiving a business valuation of the company so all partners understand their financial position.
Creating a transition plan before selling your business can help new owners ramp up more quickly and further cement your establishment's success.
If you’d like more information about building a transition plan or strategizing for your retirement, call the office today.