Top 10 tips to sell your business and not leave money on the table business brokers raleigh nc

Top 10 tips to sell your business and not leave money on the table business brokers raleigh nc

Canada has a good market for quality businesses. But a CIBC world markets report says that some 310,000 of us plan to transfer control of our companies within the next five years, a staggering number that represents half of small-and medium-sized businesses in canada.

And here’s an extra one to start you off—for the best results, start planning three and a half to five years ahead, allowing at least six months to analyze the business, two years to build value and take advantage of tax strategies to maximize the proceeds of the sale, and another year to sell.

Canada has a good market for quality businesses. But a CIBC world markets report says that some 310,000 of us plan to transfer control of our companies within the next five years, a staggering number that represents half of small-and medium-sized businesses in canada.Business brokers raleigh nc

You’ll want your business to be one of them. Here are our top 10 tips to sell your business AND protect its value, increase your personal wealth and reduce the taxes you will need to pay on the proceeds.

And here’s an extra one to start you off—for the best results, start planning three and a half to five years ahead, allowing at least six months to analyze the business, two years to build value and take advantage of tax strategies to maximize the proceeds of the sale, and another year to sell.

• but make sure you are ready to leave the business. When your personal and professional identities are fused together in your business, it can be hard to know what you want out of life once you leave.

• the two main tax structures in the sale of a business are the shares of a corporation and the assets of a business.Business brokers raleigh nc tax considerations and lead times are different for each option. To do a share sale, the company must be clean and have good financial records.

• the difference between the cost of the shares and the sale proceeds is a capital gain. By taking advantage of the lifetime capital gains exemption (LCGE), share owners can potentially receive the capital gains tax free. (the LCGE for 2015 is $813,600; it is indexed to inflation, up to $1 million, for tax years after 2014).

• all the stages and processes, maintaining confidentiality, negotiating offers, managing the buyer’s due diligence, etc. Need careful balancing to bring the deal to a conclusion that works for both parties.

• it’s risky to have any one customer representing more than 10% of your business. Resolve and diversify issues of customer concentration.Business brokers raleigh nc A dependency on any given supplier is also a risk. Line up alternatives.

• recognize that MOST lawyers and accountants are not entrepreneurs or business experts. Understand that because their job is to protect your interests against all conceivable risks, the safest recommendation they can make in every situation is to not take a risk.

• be realistic in your expectations. A seller’s expectations need to be in line with the market reality when it comes to the most probable selling price (MPSP) and how long it takes to sell their business.

• the MPSP represents what the business would sell for on an open market as is, in use, in place. It factors the true earnings, the state of the business, the risks and what the market is willing to pay. For some sellers, though, it means their business is not worth as much as they thought.Business brokers raleigh nc

• while there are many factors that affect the length of time it takes to sell a business—the asking price, the buyer’s ability to secure financing to purchase the business, local economic conditions, the nature of the business and where it is located, etc.—a period of six to 24 months is typical.