Have you been thinking about selling your business? There are some things you should determine first before you make any decisions, or you could risk selling for the wrong reasons or the wrong price, which can jeopardize your future wealth and security. Here are four things to consider before deciding to sell your business.
Is the Timing Right?
Timing is essential when you plan to sell your business. To determine if the timing is right, you need to look at the current state of your business and the overall market. For one, you want to sell at the top of your game, not when your business is on the decline. When you’re profitable, not only will you become more valuable to a buyer but you will also have the power to set yourself up for financial freedom. Market timing is also important. If the market has been declining, you should likely wait until things begin taking a turn to sell.
Is My Business Valuable?
Buyers are not going to be interested in a business that has decent revenue but zero profits. If you’ve pumped your company full of tax write-offs or are highly leveraged, you will likely appear less profitable to a potential purchaser. Before you decide to sell, make sure you take these factors into consideration and spend time structuring your business to be more attractive to buyers.
Do I Have a Tax Strategy?
By the time most business owners decide to sell, it’s far too late to implement a tax strategy. Without one, you could end up paying hefty taxes to exit your business. To avoid any tax repercussions and maximize your sale proceeds, it’s best to set up a well-thought-out tax strategy ahead of selling your property.
Are There Alternatives to Selling?
If you’re not sure whether selling is right for you, or if you’re feeling pressured to sell because of poor performance, you should evaluate your other options first before selling. You may be able to leverage some of your capital, pass on ownership through employee stock options, sell as an asset and retain ownership, or take on silent investors. Regardless, it’s wise to talk to an advisor who can help you make a better-informed decision that is right for you.
At The Beacon Group at Assante Financial Management Ltd., we provide practical solutions designed to help you make smart choices about your business to gain wealth and prosperity now and into the future. Contact us today if you’d like some advice on your unique situation.