Selling Your Business

You may have sweat long hours to start up your business, however, if you are in debt, it might just be time to sell it off. It will be hard to decide, and only you know if you are able to do this without putting yourself in greater debt. As always, know yourself, and consider this article as a helpful starting point.

The value of an operating business depends on the future profits and cash flow, says Farley Cohen, a chartered business valuator and managing director of Navigant Consulting in Toronto.

But a business could be worth more than its operations if it has valuable assets, such as a building in downtown Toronto. Owners need to find experts, such as real estate appraisers, to prepare for a sale.

There are three conditions, says Hood:

The owner must have owned the shares for the previous 24 months before the sale.

The company must have 90 per cent of its assets invested in active business operations at the time of sale.

The company must have 50 per cent of its assets in active business operations for the 24 months preceding the sale.