Selling up and retiring can be rewarding if you plan it right – you’ll have time to do all those things you always meant to do – but it’s still a big life transition that needs to be carefully planned.
So just how can you best plan the future sale of your business?
Start Planning Early
When it comes to selling your business and retiring, the most important thing is to make sure you are ready to retire.
Planning your retirement is best done as soon as possible.
Many business owners make the mistake of thinking that when it comes time to retire, it’s as simple as putting their business on the market, getting a good sum of cash for it, and living off that in their golden years.
However, selling up is rarely that straightforward.
Many business owners don’t get the amount they expected to get from their business, and find it hard to live off the proceeds of the sale. That’s why planning early matters.
Take Care of Your Finances
It’s a good idea to build a plan for retirement that doesn’t rely on the sale of your business. Of course that sale can be part of your plan, but a backup plan to cover you if the business doesn’t sell for the price you expect is important.
As the article “Retirement 101: What are bonds?” points out, bonds can be a valuable part of your retirement savings.
You might also look into retirement plans, high yield savings accounts or other investments. The important thing is to know how much you will need to retire on, and put a plan in place that ensures you will achieve that.
Even if you think you won’t be retiring for many years yet, the time to start planning it is now. After all, the day will come when you either want to retire, or find that due to circumstances outside of your control, you have to.
Be prepared for that with a solid financial plan.
Build an Exit Plan Now
An exit plan is your blueprint for how you will wrap up your business when the time comes, including selling it on.
Starting your exit plan now means you can work towards it, making business decisions that not only help you now, but will make your business strong in the future when the time to sell arrives.
A key part of your exit plan should be preparing your business for success without you.
If you are in a situation where your business is built around you, selling it on could prove tricky. It’s important to prepare by making sure your business will be relatively easy to hand over to the next person, and will make a viable option for another business owner.
Growing your business now is key to a good sale when you want to retire.
By investing your energy in growing your business and making is as successful as possible, you will both generate profits that you can invest in your future retirement, and build a strong business that is more likely to sell for a good price.
The answer to “is it time to sell?” is different for everybody, but a good rule of thumb is that it’s time to sell when you both want to do so, and have a plan in place that means you will be financially comfortable, whether you are selling up early, or staying in your business to the last minute.
About the Author: Tristan Anwyn is an author who writes on topics including social media, SEO, retirement planning, and small business topics.