Business owners often underestimate the emotional as well as financial ties connecting them to their business. For many owners, the business is their identity. If that’s the case, planning a new life after the business may be as important as planning the sale itself. Some questions to ask yourself:
• What will you do with all your time that was previously spent at work?
• Do you have hobbies or travel plans?
• Is there a volunteer organization that needs your skills?
• Are you going to start a brand new business?
• And will you have enough money to live on?
When selling a business, timing is everything. Ideally, you will sell when the business is healthy and growing. An owner who can’t let go may miss selling opportunities due to changing market conditions. Or he or she may lose focus and allow the business to decline, thus reducing its value. Do you have enough drive to continue building your business, or at least maintain it at current levels?
Financial considerations also can get in the way. Many sellers don’t have other sources of potential retirement income outside of the business. And if other family members are part of the business, a seller may postpone sale plans to maintain a steady paycheck for those family members.
Prioritize which items are most important in the sale. Is it maximizing immediate cash? Ensuring a stream of income over time? Providing continued employment or transition for key employees? Every sale involves negotiation, so identify what’s critical and build your strategy to obtain those results.