What to Know Before Selling Your Business

February 22, 2016

Chicago Tribune

What are you going to do after selling your business?  Without consistent revenue generated from your business, how do you plan on paying future bills?  How will you fill your time that was previously spent operating your business?  How will you use the proceeds for the sale of your business?  All of these questions are important to answer before considering putting up your business for sale.

How much of your sale price will you actually receive?  It is critical to factor in the change in your taxes from the windfall of your business sale.  Proceeds from a business sale can sometimes be classified as purely a capital gain and is subject to a lower federal tax rate, however it is common that taxing part of the proceeds as income can put you in a higher tax rate.  Review the impact of selling your business on your taxes with an accountant prior to entering the market.

Will you business become more valuable in the future?  Buyers across all industries find business with growing profits as more attractive.  This is not surprising considering a growing business means more opportunity for large returns in the future.  If your business’ revenue and profit is stagnant or falling, waiting can potentially increase the value of your business if you are able to turn reverse that trend.  Meet with a business broker to find out more about the value of your business.