Many business owners just want to get a good price for their business when they decide to sell their business. But, if your decision depends on how much you can get from the sale, here is how to analyze the decision.
- Have a business valuation done so you know what your business is likely to sell for. This can be a market appraisal or a more complete business valuation done by an accredited appraiser.
- Find out how much you will have after the sale of your business is completed. In addition to taxes on the sale, there are likely to be other costs such as the broker’s commission, legal costs, accountant’s fees, and other costs that you may pay. A good tax accountant can calculate how much you will have after the business sale and may also be able to give you advice on how to structure the business sale to save money. We can also give you ideas on how to reduce the taxes on the sale of your business.
If you just need to know how much you will have after the sale is completed you are finished with the analysis. But, if you are trying to determine if you can afford to retire, you need to take an additional step.
- Have a financial planner analyze how much income you will have by looking at the money you will get from the sale, your other assets and income, including social security, and your age. A financial planner can also help you determine if this is enough for you to maintain the lifestyle you want. We can refer you to financial planners who will provide this analysis at no cost to you.
Even if the analysis shows that you won’t get enough from the sale of your business, going through this analysis will give you valuable information. You will have a better idea of how much more the business needs to sell for and can focus on ways to increase the selling price of your business.
BayState Business Brokers, 61 North Beacon Street, Suite 203, Boston, MA 02134
T: 617-562-5700, F: 617-562-5701
info@mabusinessbrokers.com