If you are planning to ever sell your business, now or in the future, there are 3 strategies you should use to get as much return as possible on your hard work in building your business:
Pre-sale planning. There are plenty of opportunities to increase the sale price of your company. Kimberly Hanlon, founder of our firm, is friends with nationally known business broker and author Michelle Seiler-Tucker. In her book, Sell Your Business for More Than It’s Worth, Michelle emphasizes the need for having clean books as part of pre-sale planning. The valuation of your business will be impacted if you have messy co-mingling of funds or are running a lot of personal expenses through your business. You should consider reading her book – she often helps her clients sell their business for 40% more than they could have on their own, and she shares her great tips on what you can do to make your business reflect its greatest value.
Pre-sale tax planning. Before selling your business, you need to consider your company’s tax situation as well as your family’s, and then structure the deal to minimize any taxes that could result. You will want to see which is best – an asset sale or an equity sale. They get treated differently as far as capital gains tax is concerned. You also may want to restructure any assets not used in the business to be sold apart from the company or use them for other purposes. You could also look into using charitable trusts to reduce or eliminate capital gains taxes.
Negotiate with confidence. All the planning and preparation you have done before you sell your company will help you be a more skillful negotiator. Take the time to understand the motivations of your potential buyers, which can provide excellent insight you can use to your advantage when negotiating the highest possible price for your company.
Taking these three steps will help you position yourself to get the best price for your business and help you increase your family wealth.
To learn more, see our Selling A Business page and be sure to watch our video on preparing your business for a sale.
If you’re a small or mid-size business owner and considering selling your business or want to ensure that it’s well-prepared for sale, call us at (612) 206-3701 or fill out our contact form today to schedule a business consultation session.
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