Goodbye, Corporate World: Things to Consider When Selling Your Business

About ten thousand American Baby Boomers  retire every day. Retirement is part of the circle of life, but it also has a huge impact on the economy . When you choose to permanently leave the workforce, you make room for new employees to take your place. Or, if you are a business owner, you may have to look for a suitable candidate who can run the business as you relax in your autumn years.

If you don’t have a family member you can pass your business down to, it may be time to put your company up for sale. If you’re selling your business in Provo, UT, for example, to move to Miami for a sunshine-y life, you will need an effective exit strategy.

But what does selling your company entail? Does it mean giving up your legacy? Not really. When you decide to sell your company, you’re actually preserving it. It’s just a matter of looking for responsible people to continue the operations. Here’s what else you should know about selling your company when you retire:

The Value of Your Company

Over the years or decades, you have put time, sweat, and effort into building your company and taking care of it. Now, even when you’re in a hurry to sell your business, you shouldn’t undervalue it for a fast sale.

Take time to determine the value of your company. You can start by identifying tangible factors such as the worth of your assets (e.g., equipment and inventory). Usually, a balance sheet is a good indicator of your company’s assets. Then, look at the intangible factors, such as industry reputation and brand image. To make sure you get the figures right, you can work with your accountant and a stockbroker.

The Finances and the Figures

Business bought by another business manGrown-ups like numbers, wrote Antoine de Saint-Exupéry in The Little Prince. This is true about investors. Potential buyers will ask a lot of things about your company, but mostly about the figures. You should work closely with your accountant, and make sure all the accounts, including business tax returns that date back at least three years, are clean and transparent.

The financial records should include the overall profitability and financial health of the company. It should have figures on cash flow projection, expected expenses, and overhead costs. The records should also state any loans the company may have.

The Credibility of the |  Buyer

It’s a two-way street: while the buyer is checking your company, you should also check the buyer, who can be anyone including employees, clients, partners, private equity firms, or even competitors. If your company is profitable and well-established, chances are you might get multiple offers.

Whether it’s a corporate buyout or you’re selling to a private individual, you should study their source of finances and management experience. You should also screen whether the potential buyer has already filed for bankruptcy before to make sure they are financially capable of buying your company and sustaining the business afterwards.

No one is going to be around forever, but your company has the chance to thrive even in the centuries to come. It’s just a matter of preparing to pass it down to someone who will take care of your legacy as well as you did.

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