Passing The Torch
Many small businesses depend on families to keep a business going. Owners often plan to pass the torch to their own children upon their retirement. This makes it even more challenging when owners find out the next generation is unable or unwilling to take the reins. This leaves business owners searching for a suitable buyer. Some business owners consider employee ownership, but if that proves unlikely, it is time for them to step out onto the open market.
Finding The Right Fit
A strong prospective buyer will be financially qualified to buy your business, have knowledge of and passion for your industry, and demonstrate business competency. Finding the right person can be tough and often takes a proactive approach tailored to your business, along with some outside-the-box planning.
There are steps an owner can take to make sure their business is desirable and to communicate that to interested, qualified buyers. What makes a business desirable? The answer to that is a business that is set up to last. This includes having a good business model, systems in place, complete and accurate financial records with proven profitability over a period, a dependable staff, and the right leadership team.
The seller can demonstrate their commitment to the longevity of the business by their contractual agreement with the new owners and their involvement during the transition period. The people running the business and supporting the business contribute significantly to the value of the business. The employees, the management, and the customers all must feel comfortable with the change of hands and that can take time. Some business owners, after selling their business, stay on for 6 months, a year, or even longer. Some act as consultants for a period to help with the day-to-day operations. The goal is to have a smooth and organic transition.
Think ahead as to when you want to sell and give yourself some time because it’s going to take time to prepare your business for sale.
Faced with the challenges and inexperience of selling on the open market, the owner may hire a business broker. The broker can help with preparing for sale, navigating the market and commercial property landscape, finding qualified, interested buyers, negotiating terms, and preparing a company for transfer of ownership. There’s no one right way to sell a business because every business has a different personality and energy to it. The right business broker can help create an individualized plan that will showcase your business.
We are always looking to help people with the sale of their business. We offer services in a professional
manner with a consultative, individualized approach. For more information or to receive a complimentary consultation, click here.