Selling Your Small Business
© Kurt Geer
So you've been thinking you'd like to sell your business,
Retire and have some fun. Does your business own you instead
of you owning the business? Or do you have other business interests you would like to pursue?
The first thing you need to establish is what the business
is worth and what the bottom line price is for you to walk
away. One of the best ways to find this out is through a
Third party Business Evaluation.
Speaking with someone who can look at your business
unemotionally and determine what (SHHH) the business is
hiding in cash, and recast the financials to shed a
different light on the tax returns or P&L statement.
Let face it everyone pays his or her accountants good money to
make them look bad. It's the American way trying to avoid a
higher tax liability.
Trying to base your sale price on gross sales is totally
irrelevant in helping, and basing it on net worth could cost
you thousands of dollars. Setting the asking price
will determine if your business sells next week or next
year.
Next you need to contact a Certified Financial Planner
(not your accountant) with a background in Capital Gains
and Business Transactions. Why? Tax consequences.
If you decide to take all cash now, you will be liable for
the taxes in that year.
There are ways to defer this if you plan ahead prior to the
sale. Charitable Trusts, Complex Trusts, Installment Sale,
Installment Trusts and Business-to-Business exchanges are
a few of the options available to you. You will need to find
the best option for your situation. It doesn't matter if you
are going to ask $50,000 or $500,000, why pay more taxes then
you have to.
After that you will need to market the business for sale.
Various ways to do this are by word of mouth, talk within
your industry, list it locally, contact a realtor or a broker,
list it on-line or use an advertising match making service.
If confidentiality is an issue with the sale of your business,
the last option would be your best choice.
Customers, bankers, employees and competitors finding out
that your business is for sale could end up costing you in
tons of lost sales and additional pressures while you are
waiting for a buyer to appear and rescue you.
Finding the qualified buyer and trying to weed out all the
tire kickers while keeping the sales humming could end up
being an extra full time job.
Last is closing the deal. Each situation is unique and
ultimately has to be agreed upon by the parties involved.
You can use your attorney or a business broker charging
about 1 percent at closing.
Sellers: Are you cash only and goodbye? Will you become a
Consultant for a fixed period of time? Would you even
consider working for the buyer?
Buyers may want to move in and take over by a certain date.
They may want to hire someone to run the business for them
or it could be an investor or investors bringing in there
own people to take over.
If you have done your homework as a seller you will be on
solid ground before you sit down at the table in front of a
buyer. There is at least 1 qualified buyer for every
business. Your problem is, you have to find him.
Visit http://www.free-ezine-directory.com/
for more Business Resources
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Kurt Geer has been helping folks online since 1999.
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