Morning Market Brief: Tuesday, April 11, 2023

The key to selling your business is preparation 

As some private business owners approach retirement or are looking for a change of pace, it might be time to sell their business. Doing so isn’t easy, but with the right planning and preparation, owners can maximize the value of their business. 

• Expect to spend approximately three years. To properly prepare your business for sale and maximize its value, consider a timeframe of about three years. This will give you the proper time to ideally position the business to a potential buyer.
• Take these steps to enhance the value of the business. While preparing to sell, it is important to clean up the balance sheet, keep account receivables current and secure agreements with key employees, management and clients.
• There are several advantages of selling the business. Typically, it would give the former owner liquidity, an opportunity to separate from the business, and the potential to diversify assets.
• There are disadvantages too. At the time of the sale, the family will likely lose control of the business, and the potential future returns of the business could be lost.
• Sell only after careful consideration. If the time is right for you, begin planning early. Have a financial plan in place to properly save and invest the proceeds from the sale.

It can be a daunting task to sell your business and could be emotional, given all your hard work and efforts to realize success. But careful consideration and early preparation can make the process seamless and easier for you and your family. For more, see CIBC Commercial Banking: The privately held business part 3: Heading for the exit: Selling to a third party

At CIBC Private Wealth, we aim to take a comprehensive approach to managing, building and protecting your wealth. If you'd like to discuss this market and economic update in more detail, please get in touch with your advisor any time.