5 Reasons to Sell Your Business as Part of Your Estate Plan
For many business owners and entrepreneurs, passing a successful company on to their children is one of the primary motivations for building the business. However, for a variety of reasons, this does not always work out. If any of the following statements describe you, you may need to sell your business as part of your estate plan:
1. Your children, grandchildren, and other heirs do not have an interest in running your business or lack the skills to successfully manage it.
2. The amount of money your family will need to live after your death exceeds the amount of income they would receive from owning the business.
3. You do not have any living relatives or other heirs.
4. Your business or its assets will have to be sold to pay creditor claims and other financial obligations of your estate.
5. Your vision for your business requires it be operated by a leader in the industry or a third party you have identified rather than anyone in your family.
Do You Need a Business Broker to Sell Your Business?
There are several reasons you may benefit from using a business broker to sell your business. If you have been unable to identify a prospective buyer, a business broker can match your business with interested, qualified purchasers. A business broker can market your business while maintaining your confidentiality so employees, competitors, and vendors donít learn of the proposed sale until you are ready to disclose it.
If you are concerned about entering into negotiations over the valuation of your business, a business broker can represent you and serve as an intermediary, which may result in a higher sale price for your company. An experienced business broker should also be able to connect you with the right legal and financial advisors to help you structure the transaction, minimize tax liabilities such as estate taxes, handle employment matters, etc.
Most business brokers are paid a commission based on a percentage of the business sale price. One of the best resources for finding a business broker is the
International Business Brokers Association, Inc.