Are you thinking of retirement? Selling your business?
Are you thinking of pursuing a different career or starting a new business?
These decisions are never simple or black and white. Phoenix Business Advisors Business Brokers help you seek and understand the details within the grey area.
There are numerous things to consider when thinking of retirement or selling your business. Most business owners dedicated their entire lives to growing and establishing their business and it is never an easy decision to sell it. While some owners look to sell the business for a profit, many also want the brand/business to continue, prosper and grow.
Business owners may also be coming to an age where they either are no longer capable of managing/running the business on their own (if the business grows too large, takes too much of their time) or simply are now looking to plan for rest of their lives. Spending more time with the families, friends, indulging in new hobbies, travelling or simply taking a break are often common reasons for why people consider retirement and moving on from their business.
There are several key factors to consider when considering retirement from your business or pursuing a different future opportunity, listed below are a few we would suggest you consider.
- What is your exit plan?
- No business owner can run their business by themselves forever-Either you will have to pass it forward to someone else, retire (along with the business), Sell it, or let someone else take over while you continue to provide consultation as long as you are healthy and able to. Father time waits for no one! It is best to prepare for the future while you still have all your options available to you. Develop a strategic short-term & long-term plan now to execute.
- Develop a financial plan!
- Before it’s too late, take some time to develop a financial plan that will benefit your family and yourself in the future/after retirement. While many business owners spend over 50 hours a week on developing and establishing their business, they however do not take the appropriate precautions and plan a financial plan that will protect and support their future needs.
- Find insurance coverage.
- Depending on your specific circumstances, find yourself the appropriate life, auto, business and home insurance. Locate a professional insurance agent with the right experience that will be able to assist you and your family in getting the right product and policies as it pertains to your business and personal life.
- Diversify your income!
- One mistake that many business owners seem to make is solely depend on the income from one asset which is the business they own. A good retirement strategy requires that you diversify your income. Which means investing your money that you have either saved or earned as a result of the sale of your business into multiple investments that will generate residual income. Never put all your eggs in one basket!
- Find the right successor
- Whether you are selling your business or handing the responsibilities off to someone who you trust (a friend, business partner, family member) to ensure this transition is smooth and without errors, an appropriate successor must be identified early on. This way the appropriate steps can be planed and executed to ensure all business details are forwarded and understood by the successor in an easy, comfortable manner. You would want the individual(s) to share your vision for the company and as well bring their own fresh new ideas to the table.
- Don’t work for your Business
- A successful business owner understands that working for your business and having your business work for you are two entirely different things. If you feel that your business will fall apart without your daily input, then you have done wrong. A successful business owner works on a hands-on-hands-off basis and hires a CEO so the company is functional on it’s own. This way when you are ready to sell the business you can demand a higher asking price as well since your business has more to offer without your presence.
- Build a strong foundation and systems
- A smart business owner sets up a strong system that will function on its own and can be controlled/monitored by the business successors/new owners. This means detailing the company’s KPI’s, SOP’s, detailing responsibilities, command chain, authority layouts, defining who is responsible for the profits/loss statements with a clear organizational chart.
- Learn to delegate
- A business owner who does not delegate tasks will limit the growth of their business and set the business up for logistical and operational failures once they leave. Tasks should be delegate appropriately so that the business owner can also focus on their personal life and family along with the ability to sell the business when the need arrives.