Selling your business is a major decision that requires a lot of thoughtful consideration. The legalities involved with the sale of a business are complex and there are various factors that you should consider before you begin.
According to the U.S. Small Business Administration, there are three different ways that you can transfer a business to another person or entity.
The outright sale of a business
The first way to transfer ownership is through an outright sale. In an outright sale, you sell the business in full and immediately receive the payment. Generally, owners who want quick cash and an easy exit will conduct an outright sale.
The gradual sale of a business
In a gradual sale, you do not fully transfer your business right away. When the buyer cannot afford an outright sale, he or she may finance it over a long-term payment plan. During a gradual sale, you still receive an income as the owner, but you do not have to run the business.
A lease agreement for a business
A lease agreement is not a permanent sale of your business. Instead, you lease the ownership to another person or entity for a specific period of time. To transfer business ownership, you create a contract detailing the payment options and the lease length.
When selling, make sure you have an appropriate valuation of the company. You should value all real estate and property connected to the business, including intangible assets. Keep in mind that liabilities also count towards your overall valuation.