How to Finance a Handover
You have worked hard to build your business. Years, even decades, have been committed to building your business and earning your reputation. Now that the time to begin considering a succession plan has come, there are a number of key issues to consider. Once you have made the decision to hand your business over, perhaps the greatest question you may need to consider is how the deal will be financed. There are numerous ways to finance a handover of your business. The method you choose may depend on not only the particular buyer, but also whether you want to receive regular payments from the handover of simply get a lump sum payment once the transaction is complete. Whatever you decide to do, the very first step will be getting all of your paperwork in order. This may include tax records, inventory, accounts receivable, accounts payable, real estate holdings and more. Once you have all of the necessary information in order, it's now time to make some decisions. What is the Business Worth? Before any financing for a handover can take place, the business must be assigned a value. This can vary greatly from business to business, and can depend largely on the type of business being discussed. Although there are some common methods of valuation, such as X times trailing earnings, you may be best off consulting a business broker or advisory firm.