How to Sell Part of a Business

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Selling A Business
Selling A Business (Image: Google images)

If you are ready to semi-retire, and want to invest in something new, or just plain need the money, selling part of your business may be a good plan. Here are some tips to guide you through the process.

Consider selling stock in your business. The best way is to find private investors, and have each put up as much as possible, rather than having a lot of little investors. Still you need to determine how much private investors will have a say in your business and if it is a good personality fit.

Investigate selling a franchise of your company. This will allow you to keep your business and bring in extra revenue. However, you will still need to provide support to whomever you sell the franchise to. This may not be a good option if you want to sell part of the company and have no further responsibility.

Think about selling just a portion of your business if it has several facets. If you own a health food store and a luncheonette offering organic food, consider selling one or the other. Make sure you have a contract for the health food store to continue supplying organic food to the luncheonette.

Check with a CPA to reduce the taxes from the sale of part of your business. You don’t want all your profit eaten up with taxes. Helping to finance the sale of your business or taking the proceeds of from the sale in installments may also reduce your taxes and give you a source of income.

Sell part of your company to your employees. This is very popular way to ensure the company will continue to thrive. You may want to make arrangements now with your trusted employees to provide a smooth transition. It also helps both you and the employees plan for the future. Also they may work harder knowing they have a financial stake in the future of the company.

Tips & Warnings

  • Use some of the profits from selling your business to plan for retirement.
  • Don’t sell of so much stock in your business that you lose the controlling interest. Even friends and family members could decide to take over and change things without your approval. Make sure you can agree on how to manage the business in the future.

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