When you think about the sale of your business, what do you see?
Some business owners imagine the business running successfully forever, even without them at the helm. In other words, they imagine the business they have built will be a monument to them. It is their legacy. If this is your plan then you need to stay away from selling to organizations that will take your business and absorb it into theirs.
Here is a corner store example. You sell your corner store to a chain, they change the name (think Seven Eleven or Needs) and your store becomes one of many. If you sell your store to an individual they are more likely to keep the name and operate the business more like you did.
If you were offered the same price by the chain or the individual you would probably sell to the individual. The more common situation is that the chain has deeper pockets and will offer to pay your full price and the individual cannot afford to match that price.
Selling to an individual often means that you will have to wait for your money. They want you to take a mortgage or a note and they will pay you from the profits they earn running the business. This is called an “earn out” or a “vendor take back.”
When the time comes to sell your business you may have a choice between leaving a legacy and getting paid a good price. Only you can make that decision.