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Your Small Business: What’s Next?

Whether you wear your ego on your sleeve or not, there is a profound feeling that you’ve changed the lives of so many people by providing products or services in your community – whether it was a Grande Latte or call center consulting. Yet, as they say, “All good things must come to an end” … which is unfortunately true of your stake in ownership. Eventually, you will need to leave the empire you’ve created behind in some facet or another. It can be a terribly emotional decision, but it must be governed by logic as well. This guide has been created to point out the various issues and priorities to consider before taking that giant leap.


Of course, not everyone leaves their business voluntarily. Some of us gave entrepreneurship our best shot, but we’re wrenched away – kicking and screaming. Either the money dried up, the market dried up, or we jumped into the kettle before testing the water temperature. Whatever the case may be, your first impulse when you start seeing red in your accounting books may be to jump ship. However, there are several steps you can take when customers aren’t buying, which we detail in article one.

 

Next, we chronicle the best reasons to sell in 2012 because, honestly, there are good reasons to sell and bad reasons to sell. Being prepared is half the battle. You’ll want your business to be as attractive to potential buyers as possible, so it may not necessarily be a good idea to get out of the company just because profits are tanking. In Points To Consider Before You Sell, we’ll gloss over marketing, advertising, qualifying buyers and preparing your documents in the year or two before you exit.


When the time comes, you’ll note there are many different ways to exit gracefully – some of which you may have never considered before. We discuss the pros and cons of five different exit strategies, including liquidating, finding a buyer, finding an acquirer, making an IPO, or taking a cut. Every situation is different, of course.


One of the trickiest parts of selling is determining how much your business is worth. Overall business valuations are declining and sellers rarely make the right assessment on their own. You’ll need to look at the stability of the company over the past three years, the customer base, profit margins, expenses and branding.


Next, we discuss how to find the best buyer by pre-qualifying, enlisting help from a broker, getting your house in order, looking in the right places and tempering your expectations. To sell your business to the right person or entity, you’ll need to understand what motivates different types of buyers. Some buy for money or glory, while others buy for your trade secrets or your client base.


Buyers may be looking for profitability and stability, but it’s still possible to get a deal if your business is financially floundering. You may be able to make a case for the future, hold off a little longer until your company reaches stability, or consult an expert to find out how to make a calculated turnaround. Sometimes it’s all a matter of finding the right angle or pitch, as long as it’s honest. We’ll show you how to sell when your tank is empty.


On the other hand, if you’re a profitable venture and you are really serious about commanding top dollar for your enterprise, you won’t try to go it alone or list online: you’ll get a professional team comprised of a broker, an accountant, a lawyer and a business consultant. These experts will guide you in how to sell your business for more.


You may be wondering why you need a lawyer, but you’ll find they are essential in saving you money and protecting you during this delicate transition period. Likewise, finding the right business brokerwill more than pay the salary of your hired help. Selling a business is stressful, so the more hands on deck, the better! Speaking of which – you won’t want to forget to hire an accountant to remind you of important tax considerations in the sale of your business. Knowing the ins and outs of the IRS could mean the difference between paying 15 percent capital gains tax on the sale or 35 percent in personal income tax.


Many a false step can be made during the sale process – whether you’re inadvertently obstructing the sale with your poor attitude or stubbornly trying to do everything yourself, as you are so accustomed to doing. You’ll want to avoid the top 5 pitfalls in our list to get a quicker and more efficient sale. We’ll also give you exit strategies for unanticipated pitfalls – such as a scenario where you are ready to sell, but your partner does not want to sell. Hopefully our guide will help you make the best business decision -- and keep your friendship intact.


After talking things through with your partner or thinking pensively, you may be having last-minute doubts and decide you don’t want to sell at all. You’re back to square one. We’ll give you several alternatives to selling that you may want to consider at the 11th hour. There are times when it’s prudent to stay, but there are also ways of gradually disengaging from the day-to-day operations, without sacrificing your involvement totally – and you may financially come out ahead of the game this way.


Lastly, if you’ve reached the end of this guide knowing that you simply must sell – whether you are happy about it or not – we will take you through the emotional transition you’ll need to make on your journey. Coping with change can be the most different part of the sale if your business has been your lifeblood for decades. Where will you go? What will you do? Who will you be? These are questions we cannot answer for you. Even so, this topic deserves mention. You’re standing on the crest of a very big wave, but the moment is now. As the sea swells, collect this advice and let it carry you to smoother, calmer seas – your life after a small business sale.  

 

 

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