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Helpful
tips about selling a business.
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| Timing
Your Sale - The
decision to sell your business is a personal decision
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A
forced sale will result in receiving a lower value for your
business. Do not wait until you have no choice but to sell.
Take an objective look at your situation and begin sales
proceedings at least eight months to one year ahead of time.
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following are some questions you should ask yourself
when considering selling a business: |
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Are
you approaching normal retirement age? |
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Has
your health begun to deteriorate? |
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Do
you no longer feel challenged by your business? |
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Are
you becoming burned out? |
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Are
you in the midst of a divorce? |
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Is
there an heir apparent in the business? Can
your son, daughter, or favored employee take over? |
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one or more of these questions apply to you, then
you should proceed with the sale of your business. |
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If
you can time your business sale to coincide with
an economic growth period in your industry when buyers out
number sellers and will pay premium price, you will most
likely receive the best price.
In addition, if a buyer suddenly appears who needs your
business for a unique reason, such as synergy with his company,
to capture a specific market segment, or to buy market shares
in your area, you may be able to negotiate a premium price.
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following questions gauge the climate
for selling your business: |
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Is
the stock market rising? |
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Has
your type of business suddenly become a "trendy"
business? |
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Is
your type of business reaching a new high
in sales and profits? |
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Is
your business doing exceptionally well compared
to other businesses? |
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Is
your business at or nearing a peak? |
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| Be
a smarter seller. Recognize that market conditions,
as well as your own personal reasons for selling,
will affect the price you receive for your business. |
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| Create
a Business Exit Plan |
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Your
business is thriving and you expect an even better year
next year. The future looks good. In fact, you are having
so much fun, you cannot ever imagine leaving your business.
Now
is the time to think about an exit plan. Every business
should have an exit plan for the owner, and the best
time to plan for the leave-taking is when both the business
and the owner are healthy.
| An
exit plan is important for three reasons: |
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| 1. |
You
may be able to enhance your business's value if
you time the sale of your business correctly. |
| 2. |
You should plan for management succession,
either through a competent employee or your son/daughter,
if you do not sell the business. |
| 3. |
You will want to make personal plans for
your future after leaving the business. |
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| Prepare
Yourself to Leave |
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Plan your exit from the business now. Decide what
your goal will be and work toward it so that you can
enjoy your retirement before ill health or other factors
force it on you.
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Although it is important to prepare your business
for the sale, it is even more important to prepare
yourself psychologically. Become involved with
hobbies or other outside interests. Do not focus all
your energies on you business. At retirement, plan
to discover those other interests that you will now
have the time to pursue.
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Learn
to look at your business objectively.
You may derive a great deal of personal satisfaction
from your business, but your personal goal should
be to increase your own net worth.
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