Some people intend to pass a business to family members when they die or retire, but many business owners will sell their interest in an organization when they decide it is time to retire or move on to a different project.
Entrepreneurs and successful small business owners can sell their entire operation to a competitor or someone just starting out in the industry. For example, a retiring dentist might sell their professional practice to someone who has recently completed their professional education.
Those offering a business for sale have one chance to maximize the return on their years of investment. When selling a business, there are two important considerations that a business owner needs to address early in the process.
What the business is worth
It can be quite challenging for a business owner to establish a realistic price for the company that they have invested so much energy and effort into running. Factors including the value of company resources and projected future sales will influence an appropriate asking price for the business. Some business owners will need outside support to really establish what their company is worth.
What happens during the transition
Unless the person purchasing the company is a business partner who has already participated in its day-to-day operations, there will likely be numerous challenges during the transition to new ownership.
Especially when an owner is also an executive or the primary professional working at a company, they may need to offer transitional support for six months, a year or sometimes even longer after the company changes ownership. Business owners who offer hands-on training and part-time presence at the company after the sale can help the new owners avoid the complications frequently experienced during the ownership. It is also an opportunity for the selling business owner to receive additional income for the services provided during this time.
Offering the right support and asking an appropriate price will both be crucial to the success of a business sale transaction. Our experienced attorneys can assist you in selling your business.