When selling your private business, it’s important to understand the complex decisions that must be made, especially looking to deal with Private Equity Funds or Groups and partial business ownership into the future. It’s also important to hire an experienced broker or accountant and attorney to prepare for any surprises along the way. The profitable sale of your business is dependent upon on many factors including: timing, the overall reputation of your business, its strength at the time of sale, and the reason behind seeking to hand your company over to the highest bidder.
If you’re considering moving on to a new project, or retiring and selling your business to the next entrepreneur, here are some tips in planning the success of the selling of your private business:
Private Equity Funds are a great way for a business owner who wants to get liquidity of out of their business, but wants to remain in some type of operational control. Usually, this option is ideal for business owners looking to sell about 80 percent of the equity in their businesses, while the rest may remain in their hands. If the PEG makes the decision to sell the company within the next five to seven years, you may get more out of it than what the PEG had originally paid.
Understanding the value of your business is important when selling, as this can help you net the most profits. In order to make a good sale, it’s best to get someone to look at your company from the outside in. With a qualified professional to help you boost business value, potentially costing a broker fee, you can build your business before the sale to get the highest price possible. These business and accounting professionals keep the sale quiet, and allow you the time you need to keep the business running.
By preparing and reviewing all necessary financial statements, tax returns, and documents from several years back with the help of an accountant, you can develop a more organized sale. Listing off equipment, going over contracts related to sales and supplies, and even your current lease is important in the sale of your business. By creating these lists, and submitting a summary describing how the business was conducted and an operating manual, you offer potential buyers a presentable example of the business that they should purchase for the right price.
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For more information on how to sell your private business, tax preparation and planning, or estate and financial planning, contact Parsons CPA, PLLC.