Selling my business

[Earl Smith]

Im nearly at retirement age. I thought about just closing down and selling off my embroidery and printing machines but my accountant has advised me other wise. Accountant gave me ideas but I wanted to ask on here how you would go about doing it. I do not want to advertise locally as I might loose customers and I dont want that to happen. Even though my business is 15 years old it is still growing. This year even with the virus, Ive improved my sales. There is more potential in the business but , sadly, Im too old now to get out and make it grow.
Anybody got any pointers? How would you sell your business?

[froggy]

There is no set rule as regards price, its whatever a buyer and seller are happy with. What assets you got for sale will influence the final price, ie freehold property, IP in terms of designs, machinery etc then there is the trading value how much does it make.

I have been researching this very topic recently, its a complicated subject. Did your accountant give any indication of value?

[mrs maggot]

Earl, why not look at taking someone on, who could take over the business, maybe buy into it a 40% share, then in a year, 50% then after 2 years 80% and do it that way ? What kind of things has the accountant suggested, I would imagine it is quite different in Germany ?

[pw66]

Price often depends on how easy it is for a start -up to get into the business ('ease of entry'). In the case of a garment business it is relatively cheap and easy to set up. You might get 1 - 3 times your profit, plus a valuation on stock and equipment.

What are the tax rules for self employed in Germany? In the UK the accounting period would mean that you have a few years tax to catch up on when you stop trading. I have a friend who was in a similar position to you (not in this trade). The business would have only been worth about one years profit. He found it better to trade part time for a few years until there was very little tax liability to pay. He enjoyed working part time, he was still earning and when he finally decided to go his assets and machines were still worth as much as they would have been three years before.

You have to consider the implications of disposing of a premises lease. In the UK if the person you assign your lease to defaults then the lease probably reverts to you. Check on the implications in Germany.

[Brant]

If you've been trading for 15 years and the business is still growing, it's a no brainer that someone will be interested as it's established and any buyer would then hit the ground running. Mrs maggot gave good advice but reading between the lines I'm guessing you would like to maybe call it a day sooner rather than later. As to valuing your business your accountant should be the best person to advise you, after all he is suggesting you sell the business as a going concern. Good luck Earl.

[Earl Smith]

Hi and thanks for your thoughts. The business is still growing, especially in these last 5 years when I moved premises. If I was 40 years old I would be giving the business a real push and exploring its real potential. But at 65 Ive run out of gas and have no intention of investing more. I also work on my own and have reached the maximum of my abilities with two hands.
I like the idea Mrs Maggot put forwards. I will defiantly look into that. I have three different people who are interested so I will put the idea to them.
The tax implications have also been worrying me. I will ask my accountant about that too. We also have to carry on paying into the health system here and that is based on income. It will be a balancing act, to work or not to work.
The lease is running out soon but will be renewed. Its a complicated setup as I rent an area in a copy/computer shop and we work together. The owner knows my three potential buyers too, its a small town.
Ive much to think about , thanks again for your thoughts.