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Your Business in Transition: How to Sell Your Business When it’s Time to Retire

Your Business in Transition: How to Sell Your Business When it’s Time to Retire

| September 26, 2019

As a business owner approaching retirement, you have a huge responsibility to take care of before you step into your retirement years. You’ve worked hard the majority of your life to start a business, build your business, and ultimately watch your business thrive. Naturally, you want your business to get passed into the right hands when you retire.

 

Whether you are passing your business on to a family member, or you need to sell it outside the family, there are some rules you need to follow. Selling your business can be challenging, especially if this is your first time making such a large sale. We’re here to guide you through the process. Keep reading for our helpful tips!

 

Tip #1: Transition Strategy

Selling your business is a big transition. Not only are you stepping into retirement, but you’re also giving up something that you’ve put a lot of work into. Whether you’re selling to a stranger of your children, this process will bring a lot of change. Therefore, it may be beneficial to have a transition strategy. Instead of selling your entire business in one fell swoop, opt for selling it a few key assets at a time. Your transition strategy should also include a plan for telling your employees. You should be transparent and up front with your employees, that way they can make plans accordingly.

 

Tip #2: Pick the Right Time

You may be retiring at the end of the year, or at the end of a particular month, but that doesn’t mean you should sell your business at that time. Instead of relying on your calendar for the sale, pay attention to how the market is performing. You want to get the most for your buck when you sell your business, so don’t sell it when the market is down just because it was the most convenient time. Lay the groundwork for a sale ahead of time to ensure you are ready to make a sale on short notice. Wait for just the right time and make your move. If you are selling to a family member, make sure they know you could be ready to sell on short notice. Both parties should be prepared to move forward when the moment presents itself. You don’t want to have to delay the process because you didn’t properly prepare your family.

 

Tip #3: Follow Through

A lot of experts are involved when it comes to selling a business. You will have to work with tax, legal, and financial experts throughout the course of your sale to ensure every detail is taken care of properly. With so many points of contact, it’s imperative that you give each relationship and transaction the attention it needs. You want to stay involved with every aspect of the sale to ensure everything goes to plan and decisions are made with you and not without you. This includes the contract. You don’t want to lay back when it comes time to draft and sign the contract with your new buyer. You should be making the decisions, not the buyer. Even if you are selling to family, you want to keep things professional, just in case.

 

 

If you’re thinking about selling your business soon, Watermark Wealth is here to help the process go seamlessly. Contact us today for trusted, effective financial advice!