A successful business sale is a transfer of the business to the business owner's desired successor at the desired time and for the after-tax money that the business owner wanted or needed to financially secure his or her post-business lifestyle.
Business owners that have engaged in the planning process generally have stronger businesses that have higher transferable values. They have intentionally focused on assessing and increasing the business' Value Drivers to ultimately increase the market value of the business.
The business sale may be to one or more insiders or to a third party. The business sale may be to effect a transfer of wealth to the next generation within the family.
Whether insider or third party, the considerations have been accounted for in the planning. And, those considerations are vastly different.
A planned sale to insiders has provided for the successors to accumulate the training and necessary skill sets to successfully run the company so the business owner can easily walk away post-sale. A third-party transfer would likely require the owner to stay in the business for a specified transition period.
A sale to an unspecified third party also requires that the business be marketed in a confidential manner to attract a qualified buyer. With an insider sale, the successor is a family member, co-owner , key employee or other party already involved with the business and therefore, no marketing is required.
Many business owners assume that they are limited to a third party sale because the insiders to whom they would like to sell do not have the financial resources to pay the owner what the company is worth. The business owner is only limited if a sale is attempted without proper planning. A detailed plan can be created to facilitate a sale to an insider, ensure that the business owner gets the money desired from the business, minimize the risk of non-payment and ensure the business owner retains control until he or she has been fully paid.
Your business and your situation are unique. If you have questions or would like to discuss your specific business sale objectives, please give us a call at 818-781-0082 or Contact Us Today!