Have you thought about selling your automotive business? Most business owners are tempted to hang on to their business so they can withdraw more dividends these days. However, there are some risks to consider before doing this. Read on to find out about these risks.
The Risks of Hanging On
There may be a benefit to holding on to your automotive business for personal profit, but you should also consider the following:
- The risk is in your hands. The biggest risk of hanging on to your business is the fact that you hold all of the risk. Remind yourself that economic cycles go in different directions – and while business might feel excellent today, the next few years could be not so great in your industry.
- Always thinking about business. Owning a business will always occupy a huge chunk of your time and energy when it comes to your personal life. Of course, you can always go on family vacations, but as long as you’re a business owner, the background hum of your business will always be on your mind. Time is better than money. If you lose money, you can always get it back – but if you lose time, it’s gone forever. What do you want more of?
- Profit. It’s easy to argue that keeping your business would allow you to gain profit from dividends in the upcoming years. But think of it this way: If you have to buy replacement equipment, finance your customers, or stock inventory, most of your cash will be tied up in sustaining your automotive business. The amount of cash you’d be putting into your business each year wouldn’t be worth what you’re trying to make a profit on.
- Tax worth. No matter how your business is set up when it comes to taxes, selling might be better than the income you would get by paying yourself by holding on to your business for just a few more years.
- You might be worth more than you think. Don’t hold on to your business just because you think you can’t get anything more than the market’s going rate. You might be surprised to find out that you’re in a position to obtain a higher offer than you think.
Deciding whether or not to sell your automotive business is a big decision, and there are pros and cons to both. That’s why we have professional business brokers at Auto Center Sales who are here to help you make the most thought out decision. Contact us todayfor more information.