If you are selling your business what would you prefer: $500k now or $150,000 a year for the next 5 years? In the current low interest environment, maintaining a diminishing shareholding in your business in return for a lot less day-to-day involvement and an attractive ongoing income in a “governance “ role may be a much better proposition.
By allowing a progressive “buy in” of your business you greatly widen your market potential by making your sale more affordable. In all likelihood, the buyer will be a young enthusiastic buyer with lots of energy and ambition who will welcome your ongoing guidance and experience for a set period.
Having personally experienced this myself I know how positive an outcome can be achieved if all parties interests are well aligned.
You obtain a much better sales price and you don’t have to be working in the business on a day-to-day basis (leaving you free to hit the golf course, go travelling or go catch fish on a Wednesday) but rather work in a governance role in a board/mentoring/guidance. The same principle applies if you have a bigger business worth a lot more than 500k.
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