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Business transition
Consider your liquidity options.
By Allan SipossPublished: March 01, 2010
Allan SipossOnce the decision has been made to transition from a business, the business owner must have an understanding of all available liquidity options. It is prudent to thoroughly explore all liquidity options before committing to a transaction, and it’s critical to select the right option and strategy that would be best aligned with the personal, business and financial objectives of the owner. Here are the most prevalent options for mid-sized companies, given the current market.
• Sale to a third party
A sale to a third party often yields the highest transaction value and provides the owner with complete liquidity. Today’s market provides unique opportunities for companies that are well-prepared internally, and well-positioned and properly represented in the market. However, for a third-party sale to be successful, it is vitally important to properly prepare for, and execute, each step of the sale process.
• Sale to a related party
In certain instances, a sale or gift to a related party (family, current management team, etc.) may make sense for a business owner. While this may not provide the optimal sale price, it may offer a “lower hassle” alternative to a traditional sale. Often, this type of sale will involve the seller accepting a note or other non-cash consideration. For this and other reasons, it is important that the seller take action to minimize the associated risks and help to ensure that the full negotiated value is received.
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Allan Siposs • Sale to a third party A sale to a third party often yields the highest transaction value and provides the owner with complete liquidity. Today’s market provides unique opportunities for companies that are well-prepared internally, and well-positioned and properly represented in the market. However, for a third-party sale to be successful, it is vitally important to properly prepare for, and execute, each step of the sale process. • Sale to a related party In certain instances, a sale or gift to a related party (family, current management team, etc.) may make sense for a business owner. While this may not provide the optimal sale price, it may offer a “lower hassle” alternative to a traditional sale. Often, this type of sale will involve the seller accepting a note or other non-cash consideration. For this and other reasons, it is important that the seller take action to minimize the associated risks and help to ensure that the full negotiated value is received. NEXT PAGE >>> |
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