Common Forms of Involvement After Selling a Business
When considering commercial business sales La Cañada Flintridge, you have to be ready to stay on to guide the new owner on the ins and outs of your business. At So-Cal Business Brokers we have sold many businesses like yours and we understand the post-sale roles better than anybody. Our job when you hire us is to ensure you get the best end of the deal at the end of the day. There are two common forms of involvement and we are happy to ensure you get the best terms.
After the transfer of ownership to the new owner following commercial business sales La Cañada Flintridge, you can choose to stay on as an employee under the buyer. In this case, you will need to sign an employment contract. Needless to say, this is a very difficult adjustment for you as a seller. You will no longer have the free reign that you were accustomed to and you may have to take orders from someone else. This is not an option for everyone. In our experience, these types of contracts work best in family businesses. Our business brokers will, however, help you determine if this is the right move to make or not.
The best thing about the employment contract is that it gives you more negotiating power. Buyers will be more inclined to purchase your business when they know you will be around full time to guide them. It is also good to note that when it comes to taxes you, both salary and payments will be categorized as business expenses and are thus deductible. The best way to go about using employment contracts is to opt for short-term contracts.
This is the second option you have when selling a business. With this contract, you agree to offer guidance to the new owner for a specified number of hours per month and for a certain fee. The consulting duration will depend on the agreed terms. In commercial business sales La Cañada Flintridge we recommend a period of no more than 6 months. We also ensure that you get paid irrespective of the amount of services that are required.
Consulting agreements are mostly needed when the buyer doesn’t have familial relation with the seller. Instead of working under the new owner, the previous owner agrees to be available to answer questions and offer some input. The main drawback with consulting contracts is that you will have to be available to the new owner for the maximum number of hours agreed upon. This may keep you from embracing your new project fully. In addition to that, payment made to you will be taxed as ordinary income.
Our priority is to help you sell your business fast. One of the things we do to achieve this is to ask you to stay on to consult with the new owner. Doing so helps win the confidence of the owner and speeds up the sale. We will, however, ensure you get the best terms. Contact us now for a free consultation with our experienced business brokers.