Savvy Business Owners Plan for Success…ion–Set Financial Goals 4
There are many reasons why we might decide to sell, transfer, or liquidate our business. For many the ultimate goal is to sell the business and use the proceeds to fund other financial goals.(retirement, buy property, buy another business, give to family). Regardless of the reason for exiting the business, emotionally separating from a developed routine and an asset that has funded our livelihood can be difficult.
One way to reduce the emotional attachment we may have developed to our business is to create a success..ion plan. A plan that helps us move towards our next adventure so we don’t feel so overwhelmed by leaving an adventure.
Through proper planning sellers will identify activities and strategies to move toward achieving other goals…. like retirement. Creating a plan not only helps reduce stress and anxiety that often leads to depression but helps lower that emotional hurdle of letting go.
One important part of the exit planning process when selling is to understand what the business is worth. There are many ways to help determine a selling price (value of business assets–, business income/net cash flow– such as three times your earnings, and market value–comparisons), however coming up with the right selling price requires integrating creative and scientific skills. As the seller, if the asking price is too high it may be hard to attract buyers and if the selling price is too low, goal funding money will be left on the table. By knowing the amount of money needed to successfully move towards another financial goal makes it easier to move away from an old way of life.
To further help reduce the emotional barriers of letting go and provide aid at the negotiating table is to view the transition from the buyer’s perspective. Understand that most buyers, worthy of purchasing your business, will understand the numbers and want an adequate return on their capital investment. So before sitting down determine the range of selling prices that can you afford to accomplish your financial goals? What are options for your buyout? Does the new owner have the same values as you?
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