One of the consequences of the baby boom is that there is a raft of people all wanting to sell their businesses at about the same time to fund their retirement. There are a number of reasons why people set up their own business. Some do it for the lifestyle and independence, some want to build as much wealth as possible, others find it the best way to create employment for themselves and others. Whatever your motivation in setting up a business, there always needs to be a plan to sell it so as to maximise its value. For a lot of small business owners, the bulk of their retirement capital is tied up in the business.
When you have worked hard to build up a business it can be hard to face the prospect of letting go. However, with age comes a natural decline in your ability to keep on top of things and to deal with change. Both of these things can affect profit and value. Your bargaining power also diminishes the closer you are to letting go. In the last few years before selling, the focus should be on increasing the value of the business to a buyer.
Selling can involve some complex decisions. Perhaps there is a son or daughter who would like to take it over. This raises the issue of how to sell the business at an affordable price, while ensuring fairness with other family members and releasing enough money for your retirement. Employees are possible purchasers but may require help with funding. Otherwise, put together the key information on the business in a marketing document and send it far and wide to possible purchasers. Whatever you do, don’t leave it until the last minute to plan your sale. There’s too much at stake!