If you own a business and want to plan for your retirement, you can think about liquidating your company or selling it. If you have hard-working, loyal employees, you may want to give one of them the right of first refusal.
But is this the best business decision for you? Here are 5 areas to consider while thinking about your options.
Plan in advance
Compile the documents you need to show your business’ value and legal status. This will show your employee (or another buyer) you are serious about the the prospect of selling.
If you provide stock options as a benefit and sell to an employee, it could simplify the sale. You also might be able to use the same lawyer and cut legal expenses as well, which would benefit both parties.
An employee may offer you less money. Because they know the business from the inside, they may value it lower than you do.
Because they have an insider’s perspective, an employee will ask fewer questions. If you are in a hurry to sell, it might be a faster option.
Peace of mind
You put a lot of time and energy into starting up and building up your business. By selling to a loyal employee, you know who will be taking over your enterprise.
Retiring and selling your business can be a complicated process. Be sure to think through all the pros and cons of selling to an employee before you make an approach.