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Selling a Business in Illinois

Posted on in Buying or Selling a Business

IL business lawyerBuilding and running a business requires an immense amount of time and effort. The financial and emotional toll successfully operating a business takes, makes selling that business a very difficult decision. However, when the time comes, it is important to have a full understanding of what this sale will entail and how to prepare yourself and your business appropriately. Before you look for buyers, there are two significant decisions you will need to consider. First, why do you want to sell your company? And second, how should you value the business?.

Why Do You Want to Sell Your Business?

Selling a business can be a complex and burdensome decision. One of the most important questions you will be asked during the selling process is, “Why are you selling your business?” and it is crucial that you have a prepared, well-thought-out answer. If your only reason for selling is financial struggles, you may want to consider speaking with a professional to make sure that the decision is right for you, as selling your business can lead to more expenses in the long run.

Your motivation for selling your business can make or break the purchaser’s final decision. Common reasons for selling a business include:

  • Retirement
  • Moving to another geographic territory
  • Health or medical reasons
  • A need for additional capital to grow and expand the business

How Do You Value The Business?

You may have an idea of how much you would like to sell your company for. It is, however, vital that you remain flexible and adjust your expectations with the market flow. To calculate your business’s worth, there are three commonly used valuation methods.

The market approach requires you to compare your business to recently sold companies that are similar to your business in both size and nature. While this may not provide you a formal valuation, it will give you a good idea of what to expect.

The income approach analyzes projected revenue and expenses for potential risks, using your company’s net profits to determine value. This is also referred to as return on investment or ROI.

It is also possible to calculate your business’s net worth by utilizing the asset approach. This approach is similar to the income approach. It compares the company’s assets with its liabilities, considering both tangible and intangible assets to determine the business’s value.

Contact a Wheaton, IL Business Law Attorney Today

The process does not stop there. There are many more steps that you will need to conquer before the sale of your company can be finalized. Some of these steps include signing legal agreements and filing paperwork with the IRS. While the process will only continue to complicate, a DuPage County business law attorney can provide assistance and knowledge along the way. Contact Stock, Carlson & Duff LLC today to schedule your first consultation by calling 630-665-2500.

 

Sources:

https://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2364&ChapterID=67

https://www.ilga.gov/commission/jcar/admincode/086/086001300q17010r.html

https://www.nbcchicago.com/news/local/5-tips-for-selling-your-small-business-guest/1909949/

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