When it comes time to sell a business, it’s very important for the owner to know what steps to take. They may need to get a valuation of that business. They need to identify potential interested parties. If this is a form of succession planning – such as selling the business to an adult child – then they need to ensure that the transfer goes smoothly.
But why would someone decide to sell their business in the first place? The reason they choose may impact how this process goes. Below are a few common reasons.
Getting ready to retire
As noted above, selling the business could be a means of passing it to the next generation. But even someone who is not going to pass the business to their heirs may sell it to a third party when they want to retire.
One partner is leaving
In partnerships, it may be that one person wants to sell their half of the business before the other. They may decide to retire or simply move on to something new. But it’s a way to get the value out of the business that they’ve worked for over the years.
Reaching a high point
In some cases, it’s just a financial game. The owner believes that the business’s value has maxed out and they are looking to sell it so that they can make a profit.
Following other opportunities
Finally, those who start businesses do not always intend to run them forever. They may have other opportunities that they are interested in exploring, and selling the business gives them both the freedom and the money to do so.
Are you thinking of selling your business this year? No matter what the reason is, be sure you know exactly what legal steps to take.