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The construction industry is booming and there seems to be no end in sight. If selling your small business is somewhere on your radar, that’s great news.

As a successful business person, you may be starting to think about the next phase of your life. It could be a transition to a new career or preparation for retirement. Either way, selling a small business is an exciting step, but one that requires intention and preparation.

For those who are thinking of selling their business employee or familyFor , one of the key elements of a sale is in place. We have a potential buyer! The process changes when you already have the buyer in mind. Perhaps the business he doesn’t need to hire (or pay for) a broker or go through the process of marketing the business or stakeholder vetting.

It’s still important to be mentally prepared for the transition and make sure you have everything you need for a successful sales process.

Selling a small business to an employee or loved one

For contractors and other small business owners, selling what you’ve worked hard to build can be bittersweet. I’m excited to move on to the next phase of my life, but I want to know if my business is finally in the right hands.

Selling to key employees and family members can be a very fulfilling experience. They already know what you do, and in the case of key employees, they know your business inside and out. The best employees share your work ethic, understand your vision for the business, and are well-positioned to take over.

So, if you’re ready to take the leap, here are some tips on how to best prepare to hand over the reins.

1. Know why

As with all big decisions in life, knowing your “why” will give you direction and perseverance. Being able to look back and remember why you left the business will help you stay inspired when challenging moments strike and you feel like the finish line is just out of reach.

The reality is that selling a business can be difficult. Even if you already have a buyer in mind and that buyer is someone you know, this can sometimes be a complicated process that requires patience and stamina.

2. Plan ahead with finances and staff

Allow plenty of time to prepare for the sale of your business. This is a big decision and the more planning you do, the smoother the process will be. Work with a financial expert to ensure your financial home is in place. This helps buyers understand the current state of the business and can ease their concerns about assuming responsibility for the company you’ve built.

The timeline for selling the business is probably a few years away. In that case, if an employee or family member is interested in purchasing a business, take the time to prepare yourself mentally to fill your shoes.

The mindset of an employee is very different from that of a business owner. Teaching people with vested interests what they know outside of their day-to-day work is critical to their success.tell them what you know Previous they take over. This ensures that everything will be fine after you are completely out of business.

3. Get a professional appraisal

Determining the value of something can be complicated. A business’s value to one person may not be its value to another. A more ambitious buyer may be willing to pay more than the asking price to secure your business. However, unmotivated buyers may not be willing to pay the same top dollar.

There is tremendous value in having an independent expert determine the fair market value of a construction company. Emotions can be involved when selling a business to an employee or family member because it is more personal. Taking emotion out of the process keeps sales neutral and potentially preserves valuable relationships.

Having an objective third-party-determined valuation of value provides an excellent starting point for negotiations, resolving disagreements when you and a potential buyer are not on the same page about pricing. It is useful for

4. Decide on a sales structure

Installment sales are a common method of structuring sales to small business employees. In an installment sale, the seller typically holds a promissory note and agrees to receive monthly payments from the buyer for a specified period of time. Promissory notes are often backed by business assets and the buyer’s collateral to help mitigate risk.

Installment sales can be a good solution for both parties involved. Your employees or family members may not have access to cash or financing to fully complete the sale at the close of the transaction. You may be able to fulfill your dream of owning a business by making ongoing installments. We have built a stable business with consistent cash flow, so barring major economic shifts, we have a good sense of future performance.

5. Notify customers

We have worked hard to earn the trust of our customers, and that is priceless. Chances are that someone will hire you on an ongoing basis. These relationships are the lifeblood of any successful company.

Whether these key clients are homeowners, interior designers, or home builders, keep them up to date once it’s finally decided that the business will change ownership. Selling your business to your employees and family means you’re making extra investments for a smooth transition. Communicating openly and effectively with your customers will set your buyers up for success.

Preparing before selling a small business

Selling a business to employees and family members can be an incredibly rewarding experience. What you build can be handed over to someone who will take the same care as you.

Selling a small business can be an overwhelming process, even if you already have a buyer on your mind. It doesn’t have to be.

Knowing your “why”, planning carefully, getting a professional assessment, structuring your sales, and informing your customers will set you up for success as you transition into the next season of life. It can also help position key employees and loved ones for future fulfilling endeavors.

CG Capital is located at 139 Genesee Street New Hartford, NY 13413 and can be reached by phone at 315-765-6032. Securities and advisory services provided through the Commonwealth Financial Network®, member FINRA/SIPC, a Registered Investment Advisor. Fixed insurance products and services offered through the CES Insurance Agency. The Certified Financial Planner Board of Standards Inc. holds the certification mark CFP®, CERTIFIED FINANCIAL PLANNER™ in the United States, awarded to individuals who successfully complete the initial and ongoing certification requirements of the CFP Board.

This article was written by and represents the views of a contributing advisor, not Kiplinger’s editorial staff. Advisor records can be reviewed with the SEC or FINRA.

Co-founder of CG Capital™

Chris Giambrone is co-founder of CG Capital™, a boutique wealth management firm based in New Hartford, NY. He is an Accredited Financial He is a Planner™ and an Accredited Investment Fiduciary® (AIF®). He also holds a retirement planning qualification from the Wharton School of Finance at the University of Pennsylvania.

Branch Address: 139 Genesee St., New Hartford, NY. Commonwealth Financial Network, member FINRA/SIPC, securities and advisory services provided through registered investment managers.