Selling a business, you once worked hard to establish and grow can be one of the most emotional moments of your life. Along with struggling with your emotions, you also need to consider a few other complex things. You may require the assistance of a broker, accountant, and even an attorney during the process.
If you are thinking of selling your business, you need professional legal advice on every step of the process. There are factors you need to consider before you put your business on the market for sale. Speak to a commercial litigation attorney today for guidance and ensure your business goes to the right entity.
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Factors to consider when you put your business on sale
Reasons for the sale.
Before you put your business on the market for sale, think about why you want to do it in the first place. One of the most important questions you might need to answer to your potential buyer is why you decided to sell your business. Some common reasons owners give are boredom, disputes, work overload, etc.
However, some owners sell their businesses because it is hard to earn profits. This can make it difficult to attract buyers. Factors that attract buyers include a strong customer base, increasing profits, and consistent income.
Evaluate opportunity cost against life goals.
Any decision you make regarding your business comes with an opportunity cost. You either lose opportunities or gain them. Think about the opportunity cost you will be giving up by selling your business and how it may impact your life and personal growth.
You may be able to think of negotiation by accurately identifying opportunity costs. For example, if a sale might cost you the chance the work with a patent, you can include a sale provision in the contract to allow you to use the patent.
Evaluate your business’s true value.
Before you decide to sell your business, it is crucially important to determine its true value so that you do not feel tempted to sell it to the wrong buyer. You should ensure your business is valued accurately before you sell, or you might never receive an offer.
Moreover, you should know what goes into evaluating a business’s value, as it is more than just your net revenue. Do not forget to consider the business’ long-term value to add to the final value.