Help Business Owners Sell: 5 Tips
We asked experts for some tips for advisors whose clients are getting ready to sell a business. Read the full story on exit planning opportunities here, or click through to see five things advisors must know about helping entrepreneur clients. -- Charles Paikert
View these five tips in a single page version here.
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<b>1. Have a candid discussion about the business value.</b>
<b>2. Understand a client's financial requirements.</b>
Consider issues such as health and long-term care coverage and construct a financial plan.
<b>3. Construct a dry-run analysis.</b>
Include financial profiles for before and after the sale. For example, a wealthy business owner may have a personal residence, concentrated equity ownership in the company, real estate leased to the company and cash flow derived from wages, company distributions and distribution of rents received from real estate. But after a sale, the former owner may purchase an additional residence or vacation home, have a liquid portfolio and real estate that is retained and leased to the acquirer of the business
The question for the client is: Will they have enough to meet their lifestyle maintenance goals?" Montgomery says. "If no, what do they have to do?"