Tennessee business owners like you have a lot on your plate when it comes to deciding how to pass your business down. After all, a time will come when someone else must step up and take the wheel. How you want this to happen will shape a lot of the business ownership transfer.

Your first step is deciding who you want to pass your business on to. There are a variety of potential options here, and each one offers its own benefits and drawbacks.

Transferring ownership vs. selling

Fit Small Business discusses five of the most common ways to transfer ownership of your business. They include transferring your business to an heir, or selling. When it comes to selling, the four most common options are co-owners, key employees, outside parties and the company itself.

Transferring to an heir is common practice, especially for family-owned businesses. If you want yours to stay in the family, this is largely the only option for you. The upside is a new owner with great familiarity with the business itself. You likely know your related heir well, too, so you have an idea of what sort of business owner they may be. On the downside, if your heir does not want to inherit the business, you have to go through the trouble of finding someone outside the family.

Who can you sell to?

Selling is relatively straightforward, too. If you choose a key employee or co-owner, you also know they have familiarity with the business. They know how things run and you can vouch for their character on a personal level. But they may not want to run the business alone, or have the money to buy it. Selling to an outside company may be lucrative by comparison, but you know very little about them and cannot predict how they will run your company.

It is important to weigh all of the benefits and drawbacks before making a decision. You can discuss your options with a legal professional to get a wider opinion.