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Three Options to Consider
Keep It in the Family
- Is there someone interested in taking it over?
- Do they have the skills and expertise to do so?
- How would the rest of the family react?
Sell to Partners or Employees
- Is there someone well suited to running the business?
- Do they have enough money to buy the business?
Sell to a Third Party
- Where to find the right buyer?
- Should you sell the whole business or just part of it?
- Do you have advisors who can structure a sale?
Tips for Winding Down Your Business
Determine the Value of Your Business
Knowing this can help you set a selling price, which will help you better plan for retirement. It can also determine a fair market value, which would be used to calculate taxes if you pass the business on to family.
Tip: Establishing a realistic value for your business is important. Be sure to seek expert advice.
Understand the Tax Impact
The tax implications of selling a business are complex. Don’t feel the need to become an expert yourself, but be aware that the tax impact is likely going to be a factor in the choices you make.
Start Early
If you’re selling your business, the process can take years—especially if you’re looking for a third-party buyer. If you’re passing it on to family, it could take time for members to get ready for the responsibilities.
Talk to Your Family
Whatever choice you make will have an impact on your family. Have regular conversations with them as you make your plans to gather their input, address their concerns, and get a sense for any interest in purchasing the business from you.
Have a Team of Advisors
A financial planner can work with you to build your succession plan. They will also collaborate with others, including your tax advisor, accountant and management team so you can get the advice you need on all elements of your plan.
Ask Yourself, “How Do I Want to Fill My Time?”
You may find it hard to picture daily life without your business and that’s completely normal. Before you wind it down, take the time to think about how you want to spend your hours in retirement. If you’re not sure, an RBC Financial Planner can help you clarify your vision.
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RBC Financial Planning is a business name used by Royal Mutual Funds Inc. (RMFI). Financial planning services and investment advice are provided by RMFI. RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.