![]() But this type of business transfer typically involves several years of preparation, which is best accomplished through a formal succession plan.įor example, if you intend to sell your stake in the business to current partners, you should create a formal buy/sell agreement that outlines how that transfer will take place, how you will determine the sale price, and how the other owners will pay you or your surviving heirs. You might already have a successor in place, such as a family member, business partner, or key employee. If the value is lower than you expected, you can develop strategies to grow the business to help boost its valuation before you sell, focus on building assets in other areas, such as your retirement accounts, or reduce expenses so you can save more. Having a realistic estimate of your company’s value helps you determine if it’s enough to support your retirement needs and legacy goals. Accredited in Business Valuation (ABV) from the American Institute of Certified Public Accountants.Certified Business Appraiser (CBA) from the Institute of Business Appraisers.Look for professionals with accreditations such as: That’s why the first step in any planning is to get an independent business appraisal. But many overestimate their company’s value, particularly professional services firms that are tied closely to the founder’s skills and client relationships. Some underestimate how much a buyer may be willing to pay for a turn-key operation with consistent revenue, like a successful vehicle service/repair shop, says Arnett. ![]() ![]() When selling a business, owners are often surprised by what their businesses are really worth. Here are 6 suggestions to help you start planning to sell your business-and for what comes next. Many business owners put off this kind of planning, but it’s critical to think through your options years before you want or need to walk away so you put the pieces in place for your preferred exit strategy. "To realize the full value of this asset, you have to do some advanced planning around your own retirement needs and the legacy you want to leave," says Nathaniel Arnett, vice president of advanced planning at Fidelity Investments. At that point, you’ll want to ensure that you and your family receive the maximum benefit from your years of hard work. But all business owners will have to step aside someday-whether by choice or by necessity. When you’ve spent years running a business, it can be difficult to take a step back and view that company in the context of your overall financial plan. Consult with tax and financial professionals on managing the proceeds from the sale.Consider whether you have an internal successor or if you'll need to find outside buyers.A professional valuation is the foundation of your plan to sell your business.Business owners should develop an exit strategy years before they want or need to sell. ![]()
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