If you want to sell your business:
1. Find out all you can about the market for your business, then ask other investment professionals if they know anyone who has executed a succession plan.
Get information that will help you formulate the most appropriate plan.
2. Use a team of experts to evaluate your business as an investment from a buyer's standpoint.
You'll want to consider the potential risk versus the potential return just as you would for any other asset.
3. Determine the financial criteria a buyer will need to meet. Doing so can help assure the continuing financial health of the business.
4. Plan how you will reinvest the proceeds from the sale. This a big step in carefully planning you and your family's financial security.
Pass onto a family member
Choose one successor when there is one clear candidate. Considering family dynamics you should prepare yourself for any problems this may cause.
If you decide to pass the business to one child, set up a plan that allows other children to receive their fair share.
Before announcing your plan, run it past your team of experts. Their support will be availablewhen making decisions that may be difficult or unpopular.
Be firm when you make your announcement. Acknowledge that the decision was difficult, but don't apologize for your decision or over-explain it.
Make sure all members of the family - whether they will be involved in the business or not - know that their needs have been carefully considered.
Set up a transition plan that gives everyone involved adequate time to prepare.
Sell your business to key employees
If family members are unwilling or unable to assume the business, an alternative option is to sell to one or more key employees.
Key employees generally understand the needs of the business and perhaps you could be retained as a consultant to bring in additional future income.
Make sure the individual has the where withal to run a successful business.
Being a good employee is one talent, running a business is quite another.
An individual who shows a willingness to learn,work long hours, make decisions and take the types of prudent risks needed to succeed may make an excellent successor.
Be certain the individual has the necessary long-term financial resources to assume control of the business.
This is especially important if, contingent upon the sale, you will serve as a consultant for a year or more or must extend financing to the new owner.
Sell your business to a third party
This option may appeal to you if you have no family members or key employees that could run the business as well as you have.
Depending on market conditions and the competitive environment, it might make sense to sell to one of your competitors, or a third party.
Make sure to consult with your accountant to ensure to take advantage of all tax savings available.
Take the business public
If you are convinced that your business will continue to grow and the company is well-established, has a good financial history, or provides a product or service that is not well represented in the market place, then it may be a good idea to consider taking yourbusiness public.
You will have to issue shares for purchase by the public and set up a management team.
This will mean that you give up some control over the business.
Offsetting the loss of control is the freedom found in passing responsibilities on to agroup.
Another benefit, as an owner of public shares, is that you can trade your shares on the open market as needed to meet your future cash requirements.
Close the operation
If you feel your business should not continue after your retirement or death, then the option of winding up the business may make sense.
Consult your accountant about the procedural issues you must deal with before you close the doors for good. These include: