If you have been thinking about selling your business, we’ve got some important advice on setting goals to help your business exit.
How you use the funds from the business sale will vary, depending on your end goals. As the vendor, this money can finance various life goals for you, so it’s crucial that you have a clear understanding of what you want to do with the sale proceeds.
What will the funds be used for?
- Building a nest egg for retirement. If your goal is to retire, the price you sell the business for will need to provide enough funds to support you comfortably through retirement. This means understanding your life goals, your outgoings and budgeting accordingly.
- Creating capital for a new business idea. You might be ready for a new business challenge. If so, your sale price needs to cover the startup costs required to fund a new business while also covering your personal financial needs in the early stages.
- Gifting money to your family and the next generation. It could be that you want to pass on your wealth to your family. If that’s the case, you need to factor in the money you plan to gift while also considering your own financial needs over the coming years.
- Making donations to charities, social causes, or political interests. If you have particular charities and causes close to your heart, you may want to donate some of your sale proceeds to these institutions. Whatever you decide to donate, make sure you know the tax implications and how this affects your tax bill.
- Investing the money to create a return. You may want to invest the sale proceeds to create a healthy return and increase your wealth. This could mean investing in other startup projects, buying shares in growing companies or putting your money into a pension scheme or high-interest savings account. Again, knowing the tax implications of any kind of investment is vital if you’re going to invest in a tax-efficient way.
Getting ready to exit the business
Selling your business is a big move, and it’s invaluable to have the best possible support and advice to guide you through the sale process. It’s always a good idea to talk to your accountant, tax agent and other business advisers and run your exit goals past them. As a founder, being objective about your business can be difficult. But external advisers have the advantage of being able to look from the outside in with real objectivity. This helps you get independent, expert advice on your exit goals, your strategy, and your tax planning.
If you’re considering selling up your business, please get in touch. We can give you the advice you need to set you on track for a successful and profitable sale.