Things You Should Keep in Mind When Selling Your Business
You’ve put a lot of hard work, time, and money into creating your business. Now that it has been running for a few years and you are making some cash off of it, you might be thinking about selling it to the next person who gives you an offer. On the other hand, you might be wondering if you should turn down the amazing deal you received because of all that you put into it. Before you choose to sell your business, you might want to keep a few different factors in mind.
Here are some things you should think about before you go ahead and hand over your company to someone else.
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How involved will you be after the sale?
Each deal is different when it comes to how involved the founder of a company is after the sale. Some are allowed to sit on the board and receive a salary, while others hand over complete control and are offered the money upfront. It is up to you how involved you want to be and whether or not you want to put those terms in your contracts you share in your virtual deal room. Not everyone cares about still being a part of a company after its sale, but if that is something you want, you should make it clear.
How will payments be made?
Will you receive your cut of the check upfront? Or will you be paid in increments or in equity over time? If you aren’t sure which route you are going to want to take, then it can be essential to take a holistic view over your finances and your expectations for payment. If your business is not quite yet making a huge profit, then you can find yourself in the position of receiving money over a period of time. However, if it is largely profitable, you might want to have payment upfront.
Don’t be afraid to ask questions
Regardless of whether or not you choose to sell, this could potentially be a large change in your life. If you are unsure about anything, then it is important to ask about how the sale is going to go through, what benefits you will receive, and how your employees are going to function with these massive changes. The more questions you ask, the more likely you will be prepared when the sale goes through and the happier you will be with the results.
Don’t be afraid to walk away
You have spent a good portion of your life and money getting your business off the ground. If you do not like the terms that are put in front of you, then you shouldn’t be afraid to ask for alterations to your contracts or to potentially walk away from the deal. Only you know the true value of your company and what you are willing to take in order to feel properly compensated for the hard work and effort you have put into building your business to what it is today.