For entrepreneurs in North Carolina, the decision to sell a business can be just as important as the decision was to start one in the first place. It’s a process that can take anywhere from months to years depending on the complexity of the transaction. This is why sellers are often advised to be as informed and prepared as possible.
Timing is especially important when buying and selling businesses. With selling, especially, it’s generally considered wise for business owners to explore their options when sales and earnings are strong. Some owners opt to sell because their objectives have changed while others do so for financial or health reasons. Transferring a business to family members is sometimes considered. It’s estimated that only 25-30 percent of closely held businesses have a succession plan, and only 30 percent end up being passed down to a second generation.
The selling process can be smoother if a business owner knows if he or she can get his or her desired price, what he or she can do to sell on his or her terms and approximately how long the process will likely take. Sellers may also want to consider whether their resources will need to be reallocated. On a personal basis, it can be just as important for a seller to know what his or her source of income would be after the business is sold and how the decision might affect his or her retirement, insurance coverage and estate plans.
With business transactions involving the sale of a business, an attorney may consult with outside resources like a financial advisor. The purpose of doing so is to identify potential tax benefits and liabilities and establish a fair value for the business based on its assets. When an agreement is reached, contacts can be reviewed by a lawyer, and an appropriate timeline for the transfer of ownership can be established.