After more than 30 years of operating your own accounting firm, you have finally decided to fully retire and sell your practice. This type of transaction can be extremely stressful and complicated. While there is no one thing you can do to make the process easy, there are things you can do to make it go smoothly.
Just like with starting a business, you need a plan when you sell one. An attorney in the New York/New Jersey area can help you minimize risk and maximize the return by protecting your interests so that you can get the best deal possible. From structuring the deal to closing it, proper guidance is essential to ensure that the transaction is successful.
In order to get a more favorable deal, there are many issues you can get in order before you even find the right buyer. Read below for a few tips on selling your business.
Identify the ideal buyer
The first thing to do once you have decided to sell your business is to identify the right potential buyers. If you have a good idea of your potential buyer, you will have an easier time of identifying issues and challenges that may be present at the time of the transaction. For example, are you planning to sell to a colleague, a key employee, or a family member?
Once you have identified who is included in potential buyers, it is time to consider how they will pay for the firm. You may be more willing to enter into an installment agreement with a family member than you would with a third party.
Get the business organized
Take to the time to get your firm in order. Go over employee compensation plans for key staff members, such as your audit and tax managers and high performers. Be sure the books are up-to-date and clean. You will need these current in order to determine the proper value of your organization. Do not rule out having an outside firm review your financials. Potential buyers may feel more secure about the valuation of your firm if a neutral third party has provided a review.
Take a step back
If you have been driving the performance of your business, your departure could have a negative effect. Take the time to let your key employees start taking the lead within the organization. Be sure that your firm can still operate at its full potential without you being present. Let your employees assume leadership roles and engage in problem solving without your input.
Consider your goals
Since you are relying on the proceeds from the sale of your business for your retirement, you need to understand and plan for your personal objectives. Think about the minimum you are willing to accept, how you will treat the proceeds, and what kind of tax consequences you will be facing. Also, be sure that you are realistic with your personal expenses. For example, budget for things like health insurance, any debts you are still paying, and the lifestyle you want once you retire.
The best course of action in selling your business is to start early. It can sometimes take years to have your firm properly prepared to be sold for the maximum value possible. Take the necessary steps to negotiate an optimal deal.