What does selling my business involve?
- Gé Sletterink
- How to
- 10 May 2023
- Edited 28 Feb 2023
- 2 min
- Selling and takeovers
Selling your business is a complex process: it is often a long process with several formal stages. What do you want to achieve by selling your business? Whom will you be selling to? What will your finances be like after the sale? But selling a business is often also an emotional issue. After all, you are closing a chapter of your life. So, give room to your emotions. An uncertain period filled with questions awaits you.
Start in time
Letting go of your business can be hard. It has been tough on many business owners. Selling your business and everything associated with it often takes longer than expected: the average business transfer takes 5 to 7 years to complete. So, start in time. Allow the emotions of yourself and others involved in the process. Take into account your partner, children and staff. Each person involved is affected differently by the process.
Set your objectives
How much do you intend to earn from the sale? To make up your mind, you must ask yourself the following questions:
- What do I intend to achieve with the sale?
- What does my partner want?
- Am I looking to sell and cash in?
- Do I want to keep the business within the family?
- Who are some of the potential buyers?
- How do I make sure my employees are taken care of?
- What would I like to do after the sale? Start a new business? Become a consultant?
Income after selling
You should also give some thought to your income after the transfer. Is your pension drawn from the sales proceeds, or have you made additional arrangements? When will the pension benefits be released? Will you be taxed on this money? Can you derive capital from your business before the transfer? You must decide how to prepare your business for sale and whether or not you will continue to invest in the business.
Selling to family members
Are you choosing a family member to sell your business to, or will you sell to an ‘outsider’? Keep in mind that they might have completely different plans for your business and staff than you might have yourself. But there are also benefits to selling to an outsider. Here is another series of questions for you to answer:
- How will you divide the property? Will you divide it among all your children, or to the successor only?
- How important is it for the business to remain in the family?
- Is there a suitable successor in the family?
- How do you keep the peace in the family and prevent any unnecessary tension?
During the fact-finding stage, you set out to find answers to all these questions. Incorporate the questions and answers into a transfer plan.
Video: Ending your business
Also think about an unexpected transfer or emergency scenario. What happens to your business if you fall ill and cannot work for a longer period of time? What if you are forced to stop working altogether? You can record your wishes in a will if you are unable to remain actively involved in the business yourself. Be sure to record wishes for after your death in a will, to ensure your business is in good hands.
Since selling your business is a complex process, it is recommended that you hire the services of a specialised sales consultant (in Dutch).
What happens next
Now that you have an idea of some of the work involved, you can start preparing the sale. You must start by preparing your business for sale.