You’ve spent years building your business and customer base. Lately, you’ve started to think about looking for a buyer and moving on to something different. As you move towards that process, it will help to understand how to prepare for it, as well as to think about what happens after you sell your business.
What Happens After You Sell Your Business?
First, Decide if You’ll Retire or Reinvest
Many business owners envision signing on the dotted line, knocking the dust off their hands, and riding off into a well-deserved retirement. In reality, business sales don’t often work that way. Typically, investors will ask an owner who is integral to the operation of the business to stay on for a period of time in order to help the transition happen smoothly. This is especially the case in smaller businesses where owners tend to be involved in many different aspects or have specialized knowledge that must be transferred to the new team.
Some business owners relish the idea of continuing on in a less pressure-filled role and helping their “baby” grow to the next level. They might act as a consultant or take a place on the board of directors. Others simply want to sell and be done. Either way, it’s essential for owners to take steps to put a succession plan into place years before starting the selling process. Even if you wish to stay active in the organization, having a leadership structure in place that can take over in your stead will make the business more valuable to investors.
One of the biggest mistakes many business owners make is to neglect succession planning, leaving it until they reach retirement age or health problems force them from their roles. This can create havoc in the organization, ultimately damaging it, and making it a less valuable acquisition target for potential buyers.
Second, Seek Out Help
What happens after you sell your business in terms of structuring your finances? This is another area where it makes sense to plan well ahead. Working with an experienced investment banking firm like MelCap Partners is an excellent first step. We’ll be able to help you ensure that you’re selling for the right reasons, as well as initiating the sale at the best time. In addition to this, your team will walk you through the necessary steps to identify and address any issues with the business that might be problematic for potential investors/buyers.
In addition to the services they provide, your investment banking team will be able to refer you to other specialists who can help you before, during, and after the sale. This includes attorneys to help you work through the fine points of the sale, accountants to review your business’s financials (as well as help you structure your own finances), and wealth management specialists to ensure that your assets are in the right place to earn the maximum value.
When the Dust Settles …
Selling a business is like sending a child off to college or to their first job that requires them to move out of the house. You’ve invested years of time, money, effort, and attention to something you’re passionate about, only to have to let it go so that it can grow to the next level. There’s a lot of sentimental value in a business, and selling it can be a very emotional process.
That’s why it’s helpful to work with a team of experts to help you work through this process — both on an emotional level and on a financial/legal level. Perhaps you’ll stay on in some capacity after the deal is through, or maybe you’ll move on to a new endeavor or spend more time with your family. No matter what, it’s important to make sure that you’re ready to sell, working with the right buyer, and selling on your terms. Those are the keys to a fulfilling transaction and moving happily into whatever comes next.