Selling a business is most likely a once-in-a-lifetime event for an entrepreneur, bringing with it a mix of complex financial, strategic, and emotional challenges. Small business owners approach the process with significant uncertainty regarding valuation, timing, and the impact on their personal identity. Below are the most common questions received from business owners who are contemplating selling their businesses:

“When is the right time to sell?”  This is the question owners agonize over the most. The problem is, there is no overarching right answer. Much like attempting to time the stock market, finding the perfect time to sell your business, based on external market conditions, is a fool’s errand. The best cues are internal, both fundamental and psychological. Business is growing? Good time to sell. Solid systems, a great team, and recurring revenue in place? Good time to sell. Owner burning out? Great time to sell (before it’s too late!! To summarize, if the business is healthy and the owner is starting to contemplate life after ownership, it’s time to contact a local business broker to discuss exit planning, valuation, and the deal flow process.

“What is my business worth?” This is generally the second question asked. Owners typically have an idea of what it’s worth to them, but will the market evaluate their business the same way? A good business broker can help answer this question, with either a formal business valuation or an informal review. Either option will provide valuable clarity. From there, confidentially going to market through a business broker is the best way to ensure an owner will both maximize their financial exit and find a buyer that’s a great fit for business continuity.

“What will I pay in taxes?” The net proceeds after taxes often matter more to an owner than the headline sale price. While taxes on the capital gains of selling your business are inevitable, there are multiple strategies available to minimize a seller’s tax burden. Partnering with a tax advisor and financial planner that has business transaction experience is advantageous. Additionally, having these conversations before going to market and during deal negotiations are critical to ensuring you’re not overpaying.

“How do I find the right buyer and keep it confidential? Identifying the right suitor who can handle the business and offer the best terms is a priority. But doing so while maintaining confidentiality is virtually impossible if trying to sell the business on their own. Associates, customers, suppliers and competition all get uneasy when discovering a small business is for sale…any or all of which will damage the business’s results and overall valuation. The right business broker will assist with all the above!

In summary, selling a small business is one of the significant events in a business owner’s life. Each of the above questions will inevitably enter the equation, but they can’t be deal-stoppers. All small business owners should be operating with an exit in mind. Doing so successfully involves assembling a trusted team, creating a plan, and taking action.