To execute a successful business sale, it’s important to plan as far ahead as possible so you achieve your main goals and objectives. If you’re planning to sell your business and retire, you may need the proceeds of the sale throughout retirement, but there are ways to significantly boost business value if you act early enough.
Every business is different, and there isn’t a ‘one timescale fits all’ when it comes to planning for a retirement business sale. The main premise is to provide yourself with as much time as possible, as this will help you address any issues and areas of concern and capitalise on your investment when it matters the most.
When should I start preparing my business for sale?
The optimal timescale for planning a retirement sale depends on the size and type of business, but you should start preparing for a business sale several years before you plan to retire. If your business’ affairs are straightforward it may take less time to plan a sale, but if not, allow yourself more than a few years if possible.
As you’re planning to sell your business to retire, you may have an approximate retirement date or year in mind, so how do you build up value in the business and plan for this type of transaction?
How do I plan my retirement sale?
Initially, you’ll need to make a detailed assessment of the current state of your business, its position in the market, and potential for growth. Only then can you take the necessary steps to make it more attractive to prospective buyers when the time comes, and maximise business value.
Here are just a few steps you might take to prepare for your retirement sale:
- Analyse your business’ strengths and weaknesses
- Set up efficient systems and procedures, perhaps involving new technology or software
- Ensure supplier, customer, and employment contracts are all in order
- Build up the business’ reputation in the local and wider communities
- Assess competitor businesses, and capitalise on their weaknesses where possible
- Develop a strong reputation for excellent customer/client service
What do I need to consider when planning for a business sale on retirement?
If you currently run your business with family or want to pass it on to a family member when you retire, you’ll need to give plenty of thought to who will take over. Succession planning can be a complex process, and you have to ensure the person taking over possesses the necessary skills and/or experience.
Perhaps you’re planning your retirement when your commercial lease ends, in which case it provides you with a defined timeframe in which to work. Operating with a healthy cash flow is also a hugely important consideration for a profitable sale, so this is another area to focus on when planning.
Professional guidance from Selling My Business
Selling My Business has extensive experience of executing successful business sales across all industries, and can provide the reliable advice you need as you start to plan your retirement sale.
We’ll provide an up‐to‐date estimate of your business’ value, enabling you to assess the sales price you’d need to fund your retirement, either wholly or partly, depending on your personal financial position.
Please contact one of our partner‐led team to arrange a free, same‐day consultation. We’ll explain how we can support you through the process, and help you achieve your objectives from the sale of your business on retirement.