For many North Carolina entrepreneurs, buying a business or selling an existing business can be a major undertaking. This kind of business transaction can mean becoming responsible for an ongoing venture or moving forward from a business you have built from the ground up. Learning about the ongoing financial implications of the purchase or sale of a business can be significant, from understanding the tax requirements to ensuring that the deal itself is one that best protects your interests.
Business owners in North Carolina may eventually decide that the time is right to sell their companies and move on to something new. However, finding a buyer can be a complicated process. To make this process easier, those who are looking to sell their companies should consider what they want to get out of the transaction. For example, it will be important to think about whether an owner wants to remain part of the company after the sale or transition away from it.
Many North Carolina entrepreneurs could benefit more from buying an established company compared to starting one themselves. However, it is still important to research the type of company that one would potentially thrive in. Furthermore, investors need to know why they are putting their money into an acquisition and what makes it stand out above the rest.
Business owners in North Carolina who want to sell their business may benefit from a period of preparation. Making the right choice as early as years before they sell may ensure that they are able to get the most money for their business.
Before purchasing a small business, North Carolina entrepreneurs should make sure that they receive the best value possible. While there can be many exciting personal factors that make a particular business a compelling investment, it is also important to thoroughly review the necessary financial documentations in order to protect one's interests. A business valuation is based on current financial activities, previous activity, potential for growth and existing levels of revenue.
Individuals who sell their small- or medium-sized companies in North Carolina or elsewhere may be able to get more than their asking price. That is the finding from a fourth-quarter survey taken by industry groups in collaboration with Pepperdine University's Graziadio School of Business. People who were selling their companies for less than $500,000 were getting 3 percent more than what they wanted from the sale.
Experts say that it's wise for business owners in North Carolina to have an exit plan for selling. According to the UBS Q1 Investor Watch Report, however, 48 percent of business owners lack such a plan. The survey included 1,085 individuals who had owned a business or were the current owners of companies with at least one employee and $250,000 in annual revenue.
North Carolina residents should exercise caution before purchasing an existing business. Taking certain steps before signing a purchase agreement can help them avoid making a costly mistake.
While rare, it's possible for a North Carolina business owner to sell their company to an employee. The primary advantage to selling to employees is that they already understand how the company works. Therefore, it can minimize any disruption that a sale may bring. However, workers generally don't have the money to make the purchase.
It is not uncommon for a North Carolina business owner to want to exit the company. In some cases, this means selling to another company. However, it is important to time the sale to get as money as possible from the buyer. One way to know that it is time to sell is that the company has grown significantly in a short period of time.