Every month, hundreds of small to medium-sized business owners decide the time is right to sell their business. Whether you’re looking for an early retirement or just some fresh business capital to invest in your next business venture, there are a series of options available to you if you’re looking to sell your business.
“Why should I sell my Florida business through a business broker?”
Business Transfer Agents and Commercial Property Agents will be able to advise you of the likely sales value of your business given its location, industry and turnover. If hired, they will advertise your business for sale under their corporate branding, present your business to active business buyers whom they know will be interested in buying your business and negotiate the sale of your business. On completion of the sale, they will charge a fee for this service and they may ask you for an up-front fee, depending on the agency.
“Should I sell my business privately?”
When you sell your Florida business privately, you are responsible for every aspect of the sale, from the pricing and marketing of your business to the final negotiations. You don’t have to sign a contract giving anyone exclusive rights to sell your business, and you don’t have to give anyone a percentage of the sale in commission fees. You will have to write and pay for your own advertising, however, and you will have to arrange your own viewings. To join the thousands of business sellers advertising on our site click here
“How can I sell my business, I don’t know where to start?”
If you’re selling your business as a going concern, you will need to be able to show potential buyers that they can walk in to your business and take the reins without any major problems. Buyers will need to know that you have the bank account, stock, goodwill and web presence (if applicable) required to make a profit from day one. If you can show basic accounting information, such as sales figures for the last 6 to 12 months, this will make your business for sale a much more attractive proposition.
“Does the business broker sell my business equipment?”
Food counter equipment that you wish to sell separately, such as manufacturing machinery or catering fridges, are classed as assets. You will frequently find that these have a value to new business buyers and existing business owners who are looking to expand or re-fit their premises in a cost effective manner. You need to make it clear to the potential purchaser that it is the business assets, and not the business itself, that you are selling.
“Can I sell my company if I am a sole proprietor?”
If you sell your business as a sole trader, the value of the premises you operate from and the assets you have will remain the same, however it will be hard to put a value on the ‘goodwill’ element of your business. Your suppliers may have given you credit on the basis of your own personal payment record, for instance, and they might not wish to continue this arrangement with the new business owner. Equally, all trading licences and qualifications will be in your name and are unlikely to be transferable. If you are concerned that this will affect the selling value of your business, it’s worth speaking to your accountant, or requesting a free valuation of your business here.
“How long does it take to sell my florida business?”
The length of time it will take to sell your business will depend on a series of factors, and on the price you are looking to achieve. If you are looking for a quick sale, it’s best to set your asking price just below the asking price of other comparable businesses for sale. If you have a sum in mind that you believe is at or above the current market value for businesses of your type in your location, then it may take longer to find the right buyer.
“How much of Florida tax will I pay if I sell my business?”
This will depend on how your business is configured and which parts of your business you are selling, and will differ greatly depending on your situation. If you are at an early stage in the process and looking for a rough estimate, the UK government’s Business Link website has an interactive tool which can give you an idea of what to expect. When you approach this stage it’s important to take professional advice; ask your agent, accountant or solicitor for more information.
Closing your business can be a difficult choice to make. The Small Business Administration’s counseling tool can connect you with local guidance in planning your exit strategy. It’s also helpful to seek advice from your lawyer and a business evaluation expert, along with other business professionals including accountants, bankers, and the IRS.
Follow these steps to closing your business.
- Decide to close. Sole proprietors can decide on their own, but any type of partnership requires the co-owners to agree. Follow your articles of organization and document with a written agreement.
- File dissolution documents. Failure to legally dissolve an LLC or corporation with any state you’re registered in will expose you to continued taxes and filing requirements.
- Cancel registrations, permits, licenses, and business names. Protect your finances and reputation by canceling any of these that you no longer need, including your trade name.
- Comply with employment and labor laws. Reference the Worker Adjustment and Retraining Notification Act (WARN) for employee payment after closing, along with other federal and state laws.
- Resolve financial obligations. Handle final returns for income tax and sales tax. Cancel your Employer Identification Number, notify federal and state tax agencies, and follow this IRS checklist.
- Maintain records. You may be legally required to maintain tax and employment records, among other files. Common guidelines advise keeping records for anywhere from three to seven years.
Considerations on selling your business
After careful consideration, you may decide to sell your business. Sound planning can help ensure you cover all your bases.
Use business valuation to set a monetary value before marketing to prospective buyers. You can do a self-evaluation and also seek out a qualified business appraiser.
Accurately value all property and real estate tied to your small business. This can include intangible assets like brand presence, intellectual property, customer information, and projection of future revenue.
When you’re figuring out how much your business is worth, consider these common valuation methods.
- Income approach. Looks at projected revenue and accounts for potential risks.
- Market approach. Compares your business to other similar businesses that have recently sold.
- Assets approach. Subtracts total business liabilities from the total value of all assets.
Make a sales agreement with a business broker
You must prepare a sales agreement to sell your business officially. This document allows for the purchase of assets or stock of a corporation. An attorney should review it to make sure it’s accurate and comprehensive.
List all inventory in the sale along with names of the seller, buyer, and business. Fill in background details. Determine how the business will be run prior to close and the level of access the buyer will have to your information. Note all adjustments, broker fees, and any other aspects relevant to the terms of agreement.
Don’t leave out any assets and liabilities, or this can create problems even after the sale has been finalized.
Transfer Florida Business ownership
Many small business owners will face a time when they need to transfer their ownership rights to another person or entity. You’ll have a few different options available for doing so.
| Option | Scenario | Benefit |
|---|---|---|
| Outright sale | Liz owns a local clothing boutique that hasn’t performed well. With several other businesses on her plate, she can no longer afford to continue running it. She needs a quick exit and quick cash. | By selling a business in full, you will transfer ownership immediately and receive payment right away. |
| Gradual sale | Bill owns a market near his home. After the birth of his granddaughter, he now spends most of his time at his daughter’s home several hours away. After transferring business ownership, Bill no longer has to worry about running his business but is still receiving a monthly income. | This option often benefits individuals that can’t afford an outright sale, but instead are able to finance a long-term payment plan. A gradual sale is a flexible option for transferring a business. |
| Lease agreement | Barbara has decided to take a year-long cruise around the world. To take care of her day care center she’s decided to transfer ownership to a friend through a lease. | By transferring your business ownership through a lease, you’ll commit to a contract that details the conditions and payments you’ll receive for the temporary rights to the business. |
Other considerations
Transferring ownership of a family business have legal impacts, as this may require estate and gift tax obligations. A transfer of property would also likely require taxation.
It’s also important to understand how to approach the exit strategy based on business type. You may want to consult with a lawyer to see which additional rules could apply.
File in the state of Florida for a business bankruptcy or liquidate your business assets ASAP
A forced-exit has implications for your employees, assets and tax obligations.
During a bankruptcy case, you need to stay up to date with all filing requirements and taxes. Reference the IRS Bankruptcy Tax Guide for information on debt cancellation, tax procedures, and considerations for different types of business structures.
Liquidating assets usually comes as a last-resort strategy after no buyers, merges, or successors appear on the horizon. This process of redistributing assets to creditors and shareholders still requires a sound plan of action.
Before terminating your lease, selling equipment, and disconnecting utilities, talk to your lawyer and accountant. They’ll help you develop a plan to present to creditors, whose cooperation you need during this process.
Reference these steps in the asset liquidation process.
- Prepare an inventory and determine assets for sale
- Secure your merchandise
- Set liquidation value of assets with a qualified appraiser
- Use that value to estimate net sale proceeds and re-evaluate your decision
- Choose sale type: negotiated, consignment, internet, sealed bid, or retail
- Select the best time and location for your sale
- Hire an auctioneer, dealer, broker, or other expert to conduct
- Use a non-recourse bill of sale so buyer accepts the associated risk