Can You Afford To Sell Your Business?

Pros of Selling Your Business

People choose to sell their business for different reasons, whether it be retirement, relocation, or burnout. Regardless of the reason, you can benefit from the following advantages.

●       Earn a high profit if the market trends and economic conditions are favorable

●       Free time to pursue other projects and endeavors

●       Profit can be spent to pay personal debts or fund time off

●       Provide a way out of financial difficulties

Cons of Selling Your Business

If you plan to sell your business, then you may encounter a few challenges and difficulties. Before you make the decision, consider these disadvantages.

●       Possible loss of a lucrative revenue stream if the business is profitable

●       No more company expenses to claim

●       Business sale negotiations can be time-consuming

●       Tax impact must be considered

●       A possible non-compete could limit future endeavors

Considerations Before Selling Your Business

Selling a business involves closing one chapter to begin another, and there are various financial, legal, and ethical considerations to keep in mind, such as the following.

Don’t Neglect Due Diligence

Conduct due diligence as needed. Due diligence is a reasonable and fair process that involves investigating and reviewing the details of the transaction. Be open to a possible buyer wanting to assess your business and mitigate risk.

There may be instances when certain risks or liabilities are brought to light, and these should be discussed in a mature and productive manner to make sure all parties leave the agreement satisfied.

Get a Realistic Value of Your Business

Is your business worth selling? Obtaining a realistic and current estimate of your business value is one of the first steps when determining whether you can afford to sell your business or not.

It’s worth building a long-term relationship with a business broker that offers insight on the value of your business, pinpointing whether you can afford to sell your business.  The process goes beyond financial formulas and involves tallying the value of assets, analyzing the revenue, and studying market trends.

Hire the Help of Professional Business Brokers

Speaking of building a relationship with a broker, hiring expert buyer and seller services gives you the confidence to make decisions on whether you can afford to sell your business or not.

Licensed business brokers offer experience and focus, expert negotiating skills and access to a network of buyers. Rather than spending time and effort finding and negotiating a deal, a broker does the heavy lifting for you.

Consider Your Future Budget

Running a business is a form of income. Selling a business removes this income, so it’s important to consider your future income and how you will budget your lifestyle. If you plan to pursue a different business idea, then you need to have enough income to cover your expenses until it turns a profit. If you plan to retire, then you need to have enough assets to sustain your lifestyle, whether it be IRAs, annuities or investment savings.

In many instances, whether or not you can afford to sell your business will depend on the business value and how much profit the sale will turn out to be net of taxes.

Discuss the Transition Phase

There are different ways to sell a business and your decision could impact the affordability of the deal. For example, you need to consider the key employees and communities in which your business operates.

When planning the sale of a business and the affordability of the deal, consider phasing the transition, communicating strategy, and defining which assets are included in the deal.

Selling Your Business? Get in Touch!

Deciding to sell your business can be an intimidating process, especially if you’re considering retirement. Larry Goldstein of First Choice Business Brokers Las Vegas has the experience and understanding needed to assess the value of your business to make a confident decision.



Contact me at (702) 546-8844 or email LarryG@fcbb.com to find out more.