Selling a business

So let's say you have owned your own business for several years. The kids are getting older, and you and your spouse would like to retire and settle down. Sounds like a fairly typical situation, right? Millions of people face this situation at some point in their lives. They have worked extremely hard for years and years, growing that little business, only to have to either hand it over to a child or sell it to someone they have never seen. Handing a lucrative business over to a child can be a great way to ensure the financial future of your family. However, many of us do not have children who are interested in taking over the family business. They might have other interests or careers going. If you know that you will not be able to hand over the business to a child, you obviously need to start thinking about selling your business soon.

Of course the selling of businesses does not just occur when a local or family owned business sells to a stranger. Companies are constantly selling themselves to other companies, and sometimes at very high profits. So regardless of whether or not you are selling your family business, or you are selling a large, international corporation, there are some guidelines you need to know before putting the company on the market:

1. Ask yourself who you want to run the business. Many business owners would like to see their hard work of many years turned over to someone who genuinely cares about what they have done. If this is the case, you might want to be more selective about potential buyers. Interview the interested parties and find out why they want this particular business. If you don't care about this aspect, then the process will be as simple as finding the highest bidder.
2. Selling a business requires some work. Selling a business is probably not going to be like selling lemonade on the courner of your street. People are very careful about what businesses they invest in, and particularly about what businesses they own.
3. Evaluate your business. A business valuation will provide you and potential buyers with the information needed. The valuation will help to figure out how much the business is really worth, both in terms of stocks and bonds, but also hard assets and cash. You might be surprised to find the sorts of things that a business really owns-like intellectual property-that may have a value.
4. Find a business broker. Finding a good business broker can make all the difference in the world. A bad broker is like a bad real estate agent. You might really want to sell your house but you simply can't. Even if you drop the price, a bad agent can mean a no sale. Research brokers by speaking with former clients. See how long it took to sell their business and how difficult the process was. Was the broker's fee ridiculously high?
5. Are you sure that you will have the money you need after you sell the business? You have probably relied on the business for years to support you. If it is gone then will you be able to survive? Take into account basic emergencies that could arise. Without the business will you be able to afford medical insurance?

A good way to prepare to sell a business is to start early and think about what someone else will want from your company. Make smart decisions now and it will not be difficult to sell the business down the road.