WHEN TO SELL

There are many good reasons why you should consider whether now is a good time to sell your business. The most important reason, and the one many owners fail to consider, is just simply that it's GOOD PERSONAL FINANCIAL PLANNING. Your business is part of your personal assets and it has a value. As with other assets, like CDs, real estate, stocks, etc you want to at least preserve its value or work to increase its return to you.

IF THE BUSINESS IS NOT MEETING YOUR PERSONAL GOALS, YOU SHOULD SERIOUSLY CONSIDER WHETHER IT'S TIME TO SELL! Or, if you feel that the business has reached its "peak", sell to maximize your return.

REASONS WHY TO SELL YOUR BUSINESS

A business has reached its maximum potential when:

• You lack the capital needed by the business in order to continue to grow.
• You can no longer adequately handle the business operations because it has become too big.
• Growth has tapered off.
• You personally: are not happy with the business, are ready to pursue other opportunities, are too ill to maintain its sales, or are ready to retire and there's nobody in the family to take over.

MAKING " TRADING BUSINESSES" WORK FOR YOU

Sometimes we are faced with the question of, "WHAT AM I GOING TO DO IF I SELL?" While this is a difficult question to answer, it tells us that the seller is generally not happy with the business. The business should be sold! The real problem is not in selling, but what other business he or she can get into, one that would be more appealing. And there probably is a business out there that would indeed be found more appealing.

The solution is much like "trading up" your home. For example, if you had bought a business for $100,000 with $30,000 down, why not sell it at $120,000 with $45,000 down and you take the note for $75,000 (over 5 years at 10% interest this would amount to about another $20,000 per year).

You then buy the business you like for $90,000 with $35,000 down and pay a note of $55,000 (over 5 years at 10% interest you payout about $14,000 per year). YOUR NOTE PAYABLE ON THE NEW BUSINESS IS COVERED BY YOUR OLD NOTE RECEIVABLE WITH SOME $6,000 PER YEAR CASH LEFT TO YOU. All the profits of the new business are kept by you and are not needed to payoff the seller!