You’ve worked hard to build your business. Small business ownership is a pursuit filled with extremes – extreme excitement, extreme disappointment, and extreme sacrifice. It’s no wonder that deciding how best to leave your business can also be an emotional decision. Today’s topic takes the emotion out of that decision and simply lays out your options.
The first, and most common exit strategy, is to sell the business either to an individual or to another company. A sale of a company would most likely result in the seller receiving cash in exchange for the business. Another exit strategy is a buyout, in which an individual or group of individuals will buy out your ownership of the business and take over its operation. A third exit strategy is a merger, which happens when two companies get together, determine the value of the two businesses, and form one larger business. Or, if a business owner doesn’t have any debt, he or she might decide to simply close the business and sell its assets.
No matter the exit strategy you choose, the most difficult part of any of these transactions is determining the value of a business. Often, because of the worth of intangible assets, like a business’s reputation or customer base, determining a company’s value is not necessarily a simple pursuit. This is why it’s important to have your assets appraised or have a business valuation performed by a certified appraiser who has experience calculating the worth of a business’s tangible and intangible assets. If you are considering retirement, or a sale or closure of your business, contact the professionals at Present Value to discuss your options.
