Business owners have the option to sell their company and get ready to retire with a hefty investment in their future. Selling a business requires critical steps for the owner, and a broker helps the business owner reduce the red tape and achieve their objectives. Retirement is an exciting time for anyone, but a business owner ready to sell and start a new life needs professional guidance. Brokers show them the ins and outs of selling a business and avoiding serious mistakes. Reviewing how to sell a business before retirement helps the owner make sound choices.
Test the Current Market
Testing the current market shows the business owner the best time to sell the company. The condition of the market and current prices for similar companies defines the total amount the owner could expect when selling. However, if there isn’t a chance that the owner won’t get a solid return on their investment, it isn’t the time to sell. Conducting a market analysis helps the owner arrive at a selling price based on what the buyers are paying. Business owners that need help with selling their company are encouraged to contact CGK Business Sales for further information now.
How Can a Broker Help You?
A broker helps the business owner review the steps for selling a business before retirement. The brokers discuss what the business owner needs when presenting the business to prospective buyers. Brokers are well-versed in how to sell businesses to investors and get the business owner a greater return on their investment. The process isn’t simple, and the broker must prepare the business owner for an upheaval of their entire company. Major changes will occur when ownership changes hands, and the owner must follow steps to protect those who depend on the owner.
Get an Appraisal and Arrive at a Selling Price
Appraisals provide better information about the value of the business and its assets. Hiring a professional to appraise the business and its assets gives the owner official documentation to support a specific asking price. When arriving at a selling price, the appraisals show what the business is worth and why the buyers should pay the price requested. Reviewing details shows buyers the business is a viable investment.
Collect Financial Information and Documents for the Business
Financial information and documentation for the business starts with at least the last three tax returns. The tax documents show all profits and losses, and the buyer can determine if the business has any existing tax liens. Financial records show how the business owner used to their profits throughout the year. This includes how much they paid workers, how much was used for the business, and any money that was invested. Financial data shows the buyers if the business was successful and what they can expect when they take over as the new owner.
Are You Selling Just the Local Branch or the Entire Company?
It is important to establish how much of the company the owner is selling. When selling the business, the owner is selling their brand and specific assets to a buyer. However, this doesn’t mean the owner cannot hold on to business assets that could a different venture under another name. If they have over one location, the owner could sell the business, its name, its products, and a local commercial property. They cannot use the same business name, but they can use assets the owner doesn’t want to include in the sale.
Placing the Business Sale in Front of More People
Advertising for the sale places the business in front of an audience of investors that will want to buy the business and the assets included. The broker manages the advertising and spreading the word among potential investors without providing information that could cause issues for the current owner. Some businesses keep the sale of the company close to the vest to prevent workers from walking out or jumping ship. Shareholders who hear about the sale might sell their shares and reduce the value of the company. This could have a negative impact on the sale of the business and prevent the owner from getting a higher price.
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Are Existing Products and Equipment Included?
What is being sold with the business must be included in the sales contract, and the broker includes a list of these assets when discussing the business with buyers. The business owner must create a list of all assets that are going with the business name, its product, and its brand. They are not required to sell assets that aren’t connected to the business itself. Business owners may include existing products at the business property and equipment they won’t need during retirement. Selling equipment to create the products increases the value of the business and gives the owner a higher selling price.
Will Workers Remain with the Company?
Current workers could stay with the company according to the term of the sales contract and any clauses included. Most business owners follow measures to prevent workers from losing their jobs when the business is sold. Contracts can protect the workers and require the new owner to keep them on staff. Stipulations must explain the termination process to prevent these workers from losing their jobs because of loopholes.
Buyers must review the exact terms of the sales contract and determine if they are in agreement with those terms. If the buyer wants to use their own staff, retaining an existing staff might be less appealing. However, if the company is a corporation and uses thousands of workers, it is beneficial to keep skilled workers and cut down on hiring and training costs.
Business owners work with a broker to sell their company and prepare for retirement. Brokers understand the process and guide business owners to freedom and a comfortable retirement. When preparing for a sale, the business owner must get their affairs in order and provide buyers with critical information about the company. Financial records and tax returns are necessary when selling a business. Reviewing the advantages of selling before retirement helps the business owner avoid issues that could lead to unwanted complications.
