They may seem an unusual question, and it probably is, as the answer is obvious – because that’s what the business owner in California wants to do.
The successful sale of a business requires both a motivated seller and a motivated buyer. Part of that requirement includes the seller disclosing all details of the business to the buyer and often requires the buyer to make disclosures to satisfy the seller.
The motivation that initiates the process for a business to change hands typically begins with the seller. That is, the seller reaches a point where they believe they no longer have the interest, skills, time, money, enthusiasm, patience, or energy to get out of bed each morning and head to their business.
This is an excellent indicator that it is time to sell a business and move on.
If I want to sell my business, where do I start?
Many business owners are also curious about selling their business, but are unsure if it is the right direction for them. Often, they think they are ready and so step out to see if a buyer is willing to purchase their business, but are not ready to ‘close the sale’ because they simply are not ready to sell their business.
To assist one client, I prepared a valuation for a business owner who operated a niche business selling something he was highly passionate about.
He was at an age where he thought he was ready to retire and let go of the hassles of running his business. However, he was unable to move forward and sell the business as he wasn’t sure how he would spend his time once he sold. For that reason, the seller was unable to close a deal when it came along because he simply had no post-sale retirement plan.
Working with a buyer
Conversely, I spent 11 months working with a business buyer to acquire a family business that had been passed through three generations, with no fourth generation showing interest.
One family member had led the business for 42 years, supporting and providing an income for his two brothers, three of his cousins, and all their children.
He knew he wanted to retire, but he also knew he wanted to ease into it. One of his conditions of sale was that he be allowed to work part-time in the business for 12 months before officially retiring, using that time to meet with all the suppliers and main customers who had been part of his business and world.
The buyer was very pleased, as this provided them with access to all the knowledge and many years of experience, making it a win for both the buyer and the seller.
Thinking of selling your business?
If you are thinking of selling your business to a strategic buyer in California, what is your ‘why?’ That is, why are you selling your business and do you have the answers that make sense to you? For example,
- Will you have enough money left after selling and paying all your taxes and fees?
- If you plan to retire, will the sale generate enough money to support the rest of your life and your desired lifestyle?
- The business has been a topic of conversation with family and friends, and has also garnered recognition in your local community. How will this affect your social life?
- What will happen to your employees, and will they be taken care of as well?
- How will a new owner treat your loyal customers?
- Probably the most important reason of all to answer. Owning and running the business has been a reason for you to get out of bed each morning. What will be your new reason?
The challenges and rewards of business ownership
Owning and operating a business brings tremendous challenges and rewards. Making sure there is something positive and satisfying to move to will be the difference between being willing to sell or not, or as I like to ask, “What’s the ‘why’ you are selling your business?
Once the ‘why’ is clear, the next step for most business sellers is to determine the value of their business. This is where I assist in putting together a 19-page business valuation. Many business sellers also want to know how much they will retain after paying their taxes, so I provide a tax structuring report for those individuals.
Are you considering selling your business in California and understanding your ‘why’?
Would you like to know the value of your business? For more information, please visit my webpage, Business Valuation.
For more immediate assistance, contact Andrew Rogerson, a certified business broker based in Sacramento, California, who services the entire state. Call Toll-Free at (844) 414-9700 or email him at support@rogersonbusinessservices.com.
Further reading
Accurate Financial Statements When Selling a California Businesss
The Uncertainty Principle when Selling or Buying a California Business