Should I Sell My Company?
The American economy relies on small businesses with determined entrepreneurs. These people work hard and toil bringing their vision to life. Some people work hard for many years to build a business from the ground up and, for a select few, there is a light at the end of the tunnel. The dream is to make a successful business that can be sold. That is the ultimate reward for all the hard work, ingenuity, vision and creativity it took to build the business.
There is a lot that goes into the decision – Should I sell my business? It is much more complicated than just taking an inventory of everything the business owns and selling it. You want to sell the business at the right time for the best price while weighing the tax consequences and projecting the future earnings of the business.
The first thing that needs to be considered is a fair price. You’ll need outside help for this because you are too close to your business. Plus, there are a lot of intangibles at work. A third party professional could give you a very good valuation because they see things that you don’t, or you run the risk of setting the price too high because of your love for your own business. A third party will be objective and that is crucial.
There are serious tax consequences in selling a business and those consequences depend on what city, county and state the business is located. There are also a ton of benefits in selling the business with the right selling structure. The right type of selling structure can isolate you from serious tax liability, and a third party should be able to help you out with these selling structures.
The next thing to consider is if you want to make your company as pretty as possible to buyers. It is like selling a car or house. You want the place to look as nice as possible. This includes getting all the paperwork in order; organizing it clearly and making it accessible. This takes a lot of work and must be done well ahead of time.
The next steps are marketing and negotiating, which are time consuming. It is recommended that you get a fair valuation of your company and then determine if all this work is worth it. If it is, then congratulations on building a successful business.
