Eight,Key,Steps,Selling,Your,B business, insurance Eight Key Steps to Selling Your Business and Cashing In!
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This year, some 700,000 American businesses will be sold. Most will be small and mid-sized businesses like yours. If you, too, are thinking of selling, consider these practical steps for making the process go smoothly.1. Determine a Realistic Price Range2. Understand the Tax Consequences3. Prepare for a Sale4. Seek Potential Buyers5. Negotiate Your Deal6. Sign a Sales Agreement7. Plan for the Closing8. File Paperwork With the IRSNow for the GOOD STUFF!Getting the Cash Out of your Business NoteBusiness notes, known more specifically as seller carryback business notes, are created when the buyer of a business can not or will not pay all cash. Frequently, banks and similar lending institutions are hesitant to loan money to new business owners who have minimal track records and where hard assets make up a small percentage of the total purchase price.In the case where a buyer cannot obtain a loan, the seller is left with two choices (1) hold off until he/she find a buyer who can pay all cash or (2) carry back a note in order to collect future payments. The first option is often not realistic. In the second case, the seller is hopefully able to at least extract a large down payment to make extra sure that the buyer has some "skin in the game". However, even then the seller is usually in a position that he prefers not to be in he has no lump sum of money to either invest in other opportunities or to retire. Unlike a real estate note, where is there is a hard asset that is fairly easy to appraise; the business note is relatively risky to hold.So, what is a business seller to do when he didnt want to be in the lending business to start with and now has a need for immediate cash? What many people dont realize is that the business note can be sold. The former owner can sell all or part of the note to get a lump sum of cash. In this way, both the goals of selling the business and getting the cash out of it are met.In summary, selling a business note is an excellent way for the former owner of a business to get his cash out of the business. Whether the reason for selling the note is that the seller would have preferred all cash all along, that he now has large debts to pay, or that he has the opportunity to pursue other investments, the sale of a business note is a tool of which you should always be aware.
Eight,Key,Steps,Selling,Your,B