Selling your funeral home or cemetery business continues to be a one of the hottest topics with our readers and the profession. We were recently asked about the timeline for selling your business by the end of the year. Doug Gober provides his insights on this important question.
Question: I am ready to retire and want to have my business sold by December 31,2021. Am I too late? What do I need to do to have this done by the end of the year?
Doug Gober: The short answer is no. You are not too late. However, there are many qualification statements that need to be considered to make your transition happen.
First, you must be prepared to focus on the task at hand. There are so many small elements of a transition; whether big or small, that can become larger, the shorter the time frame becomes. Also, you must have your financial house in order. If you have not filed your tax returns in the last two years or even your 2020 return, forget it.
Second and more specifically, is there already a potential suitor or do we have to find one? This can be a time-consuming obstacle to your short timeline. To properly put your business in the marketplace with the correct positioning, not only requires time to find a potential suitor but also requires time to create what they will see and evaluate.
If these first two elements are in place, the chances are good if we start right away. If either of those elements are missing, the chances are slim.
However, that is not to say that they are impossible. Each transaction tends to move at a pace commensurate with the experience level of the participants. If you have sold a business before or your potential suitor has bought a business before then you both will know what is necessary to accomplish this objective on a short timeline.
Our historical results have been that if we expect to close a transaction by 12/31 of any given year, it needs to be active by September 1st of that year. If financing will be involved, it could be an even greater challenge because there always seems to be a push for closings in the fourth quarter of any given year.
In our particular circumstance for 2021, the new potential tax changes some of which are likely to occur, have increased the urgency to get transactions completed by December 31, 2021.
Our position at TFC has always been to make every effort to meet our client’s objectives and expectations. This situation is no different. We must act quickly to assess what needs to be done in order to bring your transaction to a successful close by 12/31/21.
If you are taking this life changing event seriously, you must have realistic expectations. That’s where we come in. The team at Foresight can help.