- March 28, 2021
- Posted by: Juan Tapia
Is Your Business Ready When You Want to Exit?
The Wall Street Journal predicted the most significant transfer of wealth in history would occur in this country over this decade; $10 trillion was expected to change hands. Much of this wealth is tied up in family businesses. It’s a good idea to plan for the sale well in advance and learn from others’ mistakes.
According to an article by Veronica Dagher in the Wall Street Journal, common mistakes business owners make when they are ready to retire include:
- Creating a business that is too dependent on the owner.
- Ignoring the tax benefits of planning ahead.
- Incorrectly valuing the business.
- Rushing to accept a rich number.
- Hiring your brother-in-law to do the deal.
- Underestimating the emotional impact of selling a business.
Each of these is important to consider ahead of time. When a professional business valuation is prepared well in advance of selling, the owner knows what the business is worth and can plan accordingly. Owners do well to interview reputable business intermediaries/brokers, select one they are comfortable with and have confidence in.
An experienced business broker can provide valuation, tell the owner if there is a market for the company, what buyers are paying for businesses similar to it, and locate/screen potential buyers. An integral part of the team, the intermediary works with the owner, accountant, attorney, and banker to protect the owner’s interest and achieve a successful closing.
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