| the inconsistencies of businesses, it is important to | | | | if the business being sold is not very successful or |
| have a well-planned exit strategy so if the time | | | | does not have a strong business plan. |
| comes to sell, individuals can do so with less | | | | Another option is to sell the stock of a business |
| hassle and risk of losing money. Although selling a | | | | to the current employees in what is called |
| business can be a daunting task, there are several | | | | Employee Stock Ownership Plans (ESOP). Any |
| things to do in order to ensure a smoother sale. | | | | employee that qualifies for taxes can be allowed |
| Before selling a business, individuals should carefully | | | | to invest in the stock of their current company. |
| prepare all of their business assets to be sold. | | | | This option provides large tax benefits to both |
| They must think about exactly how much they | | | | the employer and the employee and can allow for |
| want to sell their business for and when they | | | | a business owner to only sell parts of the |
| want to sell it. It is also important to think about | | | | business rather than the whole thing. Of course, |
| how to sell the business because there are | | | | to use this option the business must be on a large |
| several different options available. | | | | scale, although not as large as what is required for |
| One of the first things individuals should consider | | | | IPOs, and have qualified employees willing to buy |
| when selling a business is seller financing. Nearly | | | | shares in the company. |
| ninety percent of small business owners who | | | | It is important to never take the first offer from |
| choose to sell their business have had to use | | | | a potential buyer. They will often start as low as |
| some kind of seller financing in order to get out | | | | they can to try to get the business for less than |
| on top. Most buyers will be unable to pay one | | | | it is worth. It is also suggested that individuals |
| lump sum of cash when buying a business and | | | | become familiar with liquidation and know how to |
| providing financing options will lead to more | | | | file bankruptcy in case they are unable to find a |
| prospective buyers. Financing, however, can be | | | | buyer or to sell the business for the required |
| confusing so it is important to have the basics | | | | price. |
| down before choosing this option. It can also lead | | | | Once an individual selects a selling option and a |
| to losing money because much of the payment | | | | buyer has been found, a sales agreement needs |
| will depend on the individuals’ former | | | | to be signed. This agreement must at least |
| business’s success. Of course, there are | | | | contain any background information on the buyer, |
| benefits to this option and several tax breaks can | | | | a clear purchase price, the Terms of Agreement |
| be taken advantage of if the seller qualifies for | | | | including payment terms, any warranties from |
| installment sales. The terms for seller financing are | | | | either party, contingencies, fees, and a date of |
| also much more lenient than financing from a | | | | closing. Many people will have a lawyer review the |
| bank. Banks generally have strict requirements | | | | sales agreement before either party signs, |
| when lending larger acquisition loans. | | | | ensuring the fairest agreement possible. |
| If seller financing is not a possible option, individuals | | | | Although the process can be difficult and the |
| may choose to sell their business using Initial Public | | | | options are vast, if individuals follow these |
| Offerings (IPOs) or Direct Public Offerings (DPOs). | | | | suggestions they should be able to sell their |
| When individuals use this option they are allowing | | | | business with much less hassle. There are |
| their business to go public, which can lead to | | | | numerous options for those people wanting to sell |
| significant amounts of earnings because the entire | | | | their business, with each having advantages and |
| public is now allowed to buy stock in the | | | | disadvantages. With this variety, most sellers will |
| company. This option can be complicated and will | | | | be able to find the best option for them and sell |
| only work for large scale businesses. It will also fail | | | | their business. |