A divorce can mean more than ending a marriage. If one or both spouses own a business together, a divorce can necessitate selling the business to divide the value between the spouses. If you have come to the decision that you cannot hang on to your business, you will likely prepare your business for sale. But like anything in a divorce, selling a family business takes some careful planning.
As part of your business sale, you will need to resolve some important questions. At the same time, your spouse should cooperate with the planning so that disagreements do not erupt that could result in court battles. Forbes describes some tips that may help you work out a sale.
Valuing your business
To sell off your business, you need to know the value of your enterprise. A value that is too low will deprive both you and your spouse of a fair share. Since there are different ways to valuate a business, there is potential for you and your spouse to disagree on a method. Asking a neutral party like a broker or a valuation specialist may satisfy you and your spouse.
Determining when to sell
You might want to sell off the business as soon as you can, but waiting might be a more prudent move. Since your business is an asset, you want to get the most out of it. You might reap a bigger profit if you put off selling until you find the right opportunity.
At the same time, be aware of any issues with your business that might make it better to sell earlier. Your company might have a shaky cash flow or diminished prospects to increase inventory. These issues might devalue your company if you hold out for a later selling date.
Coming up with a minimum offer
Think about the purchase offers you want to consider. Your business should sell for a fair price, so be ready to reject whatever you think is too low. Also, you want to be on the same page as your spouse when it comes to a minimum offer. You might not want your spouse to seriously consider an offer that you would reject out of hand.
Working out your legal terms
Selling a business means working out legal terms in advance. You should know your sale will not trigger any liabilities and that you have not omitted any legal steps in the sale process. Also, you may want to establish a non-compete clause for your spouse. If you want to start a new business, you probably do not want your spouse to start a similar operation that competes with yours.