You want to sell your business. Fast. And also get the best price for it, of course! Let’s start by what that really means. While six to twelve months is the average time to sell a business, selling time varies by business size, type, and market. Based on that model, six months is quick!
As a human being it is easy to become emotionally invested in your business. After all the things you have sacrificed for it – kids’ soccer games, recitals, family gatherings, etc., it is understandable how this can happen. However, this investment should be treated like any other. If you consult your financial adviser, stock or bond trader, they will advise you that the best time to sell when the price is highest. In the case of selling a business, it is the same thing.
Are you a business owner thinking about retiring or changing your career? Or maybe you’re at the other end of the spectrum, thinking about buying a small or medium-sized business. I was recently interviewed on the subject of buying and selling a business by Norman Jack for CFRA Radio’s Experts on Call program.
You and your wife own a business. Like many of our clients, you run the operations while your wife does the books. The business provides full employment for one or more of your children, too. Your dream has been to keep the business in the family-to see it continue through the generations that follow-a legacy. It’s what you’ve always wanted. And you thought your son and daughter did too. They never said otherwise.
Buyers usually prefer to purchase the assets of the business including intellectual property, the right to use the name, telephone number, websites and all the tangible assets. If purchasing the assets at market value the buyer may be able to achieve a greater depreciation expense going forward and reduce their taxes in future years.
You’ve done the math. And the message is clear. You won’t have enough money to fund your retirement and maintain the lifestyle you’ve come to know and expect. You’re not alone. Many 60-and-over Canadians are finding they need to keep working to make ends meet, especially if they want to maintain the lifestyle they had when they were working. Some have already retired and find they need more cash.
A crisp new year... have the country’s banks opened their wallets any wider for the purchase of small businesses in Canada? Don't bank on it! Instead, prospective buyers depend on the seller taking back a percentage—usually some 20 to 50 per cent—of the agreed-upon purchase price in the form of a loan.
If you are a business owner, nobody is going pay you for what you put into the business - they will only pay you for the value they believe they can get out of it. Yet when it comes time to sell their business, many sellers have faulty expectations of what their business is worth and what the market will pay.
A franchise is a business that is built for someone else. Thinking about your own business in those terms can give you fresh perspective on what will make your business more sellable when you’re ready to go to market. And acting on that insight will make your business more productive and profitable in the here and now.
