5 Planning Tips When Selling a Business

5 Planning Tips When Selling a Business

While some create businesses that are meant to stay in the family for generations, others start business ventures with the plan to sell eventually. If you’re of the mindset that selling your business is the best outcome, take a look at some of these planning tips you should put in place before you sell.

Create A Business Someone Will Want to Buy:

Profitable businesses, turnkey enterprises, companies with proprietary products–these are all companies that will look more attractive to potential buyers. Think of ways that you can make your business the kind of company people want to buy and build up to that vision so when you’re ready to sell, your company looks attractive to buyers in the market.

Have a Plan For the Sale Proceeds:

Selling a business can set you up with a large windfall, and if you don’t already have a plan for those proceeds, they could quickly be spent wastefully. Consider whether you want to use the proceeds to support yourself while you build another business, to invest in another company, to set aside in savings, and so on.

Remember Taxes:

It’s unlikely that you’ll be able to walk away with the sale proceeds free and clear. Talk to a tax advisor about the potential tax implications of the sale and make sure you incorporate tax payments into the plan for the proceeds.

Maintain Liability Insurance:

No matter what kind of business you run, you are exposed to potential liabilities. If you are sued–even if the complainant doesn’t win–you can drain your business defending yourself in court. And if the complainant does win, you may have to close your business as a result of the judgment. To avoid these possibilities and make sure you have an operating business to sell later, invest in liability insurance.

Keep Control Over Your Personal Spending:

Selling your business because you want to, not because you need the money, is a good place to be. It takes the urgency away and allows you to wait for the best offer. It also means that you can do more with the sale proceeds since you won’t be using it for urgent needs but instead will have the luxury of using the money where it will have the most impact. All of this can be accomplished by keeping your personal spending under control. When you effectively manage your lifestyle expenses, your debt, and your savings, you keep yourself on secure financial footing and allow yourself more restraint and patience when selling your business.

Selling a business takes quite a bit of foresight and planning. But it’s a move that can change your life and help assure your future.

 

Yorkville Advisors, LLC is a privately owned hedge fund sponsor.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s