Thinking of selling your business? Here’s what you need to know

The key factors include financial readiness, market timing, valuation and pricing, operational preparedness, and emotional considerations. Each of these aspects plays a crucial role in achieving a successful sale and maximizing value.

Financial readiness involves several key elements. You should have accurate, well-organized financial statements, clean financial records, and strong profitability and cash-flow trends. It’s important to evaluate your assets, minimize debt and liabilities, ensure tax compliance, and prepare realistic financial projections. Working with a financial advisor or accountant can help ensure your financial documentation meets buyer expectations.

Optimal timing depends on multiple factors. Look for favorable economic conditions, positive industry trends, and strong buyer demand in your market. Consider the competitive landscape and availability of financing. The best time to sell is typically when your business shows strong performance, your industry is growing, and market conditions are favorable for acquisitions.

Pricing requires careful analysis of multiple factors, including financial performance, growth potential, market conditions, and industry benchmarks. Consider engaging a professional business appraiser to determine fair market value. The price should be competitive while leaving room for negotiation. Avoid overpricing, which can deter potential buyers, or underpricing, which leaves money on the table.

Focus on strengthening your organizational structure, documenting processes, and maintaining strong customer and supplier relationships. Ensure key employees are retained and motivated. Have well-documented standard operating procedures, up-to-date contracts, and protected intellectual property. Develop a comprehensive transition plan to facilitate a smooth handover to the new owner.

Acknowledge that selling can be emotionally challenging, especially if you’ve built the business from scratch. Recognize that feelings of attachment, loss, and uncertainty are normal. Consider seeking support from family, friends, or professional counselors. Focus on your personal goals and the opportunities that lie ahead. Remember that emotional readiness is as important as financial readiness.

Holistic wealth planning helps align the sale with your broader financial and personal goals. It involves working with financial advisors to develop strategies for managing sale proceeds, optimizing tax implications, and ensuring long-term financial security. This comprehensive approach helps reduce emotional stress by providing clarity and direction for your financial future.

Consider assembling a team of professionals including:

• Certified Public Accountant to review and prepare financial documents
• Business appraiser for accurate valuation
• Legal counsel for contracts and compliance
• Business broker or M&A advisor for market insights and buyer connections
• Tax expert for tax planning and optimization
• Wealth manager for post-sale financial planning

A comprehensive transition plan should outline how the business will operate during and after the sale. Include details about knowledge transfer, employee communication, customer retention strategies, and operational handover procedures. The plan should provide clear guidelines for maintaining business continuity and ensuring a smooth transition to new ownership.

Consider developing retention plans for key employees, maintaining clear communication about the sale process (while respecting confidentiality), and ensuring that employee concerns are addressed. Work with potential buyers to understand their plans for the workforce and try to negotiate terms that protect your team’s interests.

The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of UBS Financial Services Inc Neither UBS Financial Services Inc. nor its employees (including its Financial Advisors) provide tax or legal advice. You should consult with your legal counsel and/or your accountant or tax professional regarding the legal or tax implications of a particular suggestion, strategy or investment, including any estate planning strategies, before you invest or implement. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. CIMA® is a registered certification mark of the Investment Management Consultants Association, Inc. in the United States of America and worldwide. For more information on designation disclosures and third party rating methodologies, please visit ubs.com/us/en/designation-disclosures. As a firm providing wealth management services to clients, UBS Financial Services Inc. offers investment advisory services in its capacity as an SEC-registered investment adviser and brokerage services in its capacity as an SEC-registered broker-dealer. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that you understand the ways in which we conduct business, and that you carefully read the agreements and disclosures that we provide to you about the products or services we offer. For more information, please review client relationship summary provided at ubs.com/relationshipsummary, or ask your UBS Financial Advisor for a copy.