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Last Updated on: February 18, 2020 by Joseph Muriithi
Decision to sell your business
When you finally make the decision to sell your business for retirement, it is paramount that prospective buyers come to terms and understand why you have made that decision. Having a valid reason to sell your business can stand out when the time comes and can make your business more appealing to prospective buyers. Having to retire is the most natural and valid reason for selling a business let’s face it, at some point everyone will have to retire no matter how well a business is thriving. In fact, buying a successful business from a proprietor who is retiring is just the kind of situation that most buyers will like and sing a tune to.
Retiring from a job, probably the 9 to 5 kind of job cannot be compared to owning a business and then looking forward to retirement. Retiring from owning a business can heavily change the dynamics of the business due to engagement. It is likely that you have a lot of friends ranging from employees, vendors, customers, and clients from other businesses. This means that the business could suffer from your departure and operations would be negatively impacted. It is vital that this does not happen and the way go about it is preparing in advance. Your transition should be cautioned from negative impacts by creating a situation that leaves everyone settled and happy once you are not playing your role after the transition.
Preparing for the transition
Preparing for this transition involves a number of strategies. The first strategy is handing over your mandates to a suitable candidate before diving into the selling your business for retirement process. This candidate should be well equipped to take over the roles you played in the business. Familiarize them with your friends, employees, vendors, customers, and clients from other businesses and let them handle the day-to-day operations on their own as you watch how well they fit into the position. A capable candidate should be in a position to handle the business operations during the transition period and way after you are not in the picture. Prospective buyers will be confident with the realization that a capable candidate is in control and that after the sale nothing will go out of hand.
The joy of retirement comes in those everyday pursuits that embrace the joy of life; to experience daily the freedom to invest one’s life-long knowledge for the betterment of others; and, to allocate time to pursuits that only received, in years of working, a fleeting moment. – Byron Pulsifer
The second strategy is the automation and simplification of your businesses processes. Being able to outline steps you’ve taken to automate various processes for your business will help attract more buyers using a business plan helps outline all your business processes and makes them easier to understand. No one knows the “how” of your business more than you, which makes you the best source to simplify the processes of your business. Automation processes can range from, automation of vendor deliveries, automation of payrolls, inventory management, and customer handling. Automated processes will put you out of the way and you can watch how the business fairs if you were not there at all.
I can bet that you don’t want to retire and be miserable, this said, you should set up a retirement account to draw upon if you have not done that yet. Statistics show that, on average, 50% of business owners do not have a retirement account set before they think about retirement. It is important that you do it as soon as possible, avoid regretting a situation that can be averted.
Finally, consult with a business intermediary or a business broker. They are the best way to handle the process of selling your business as you get ready for your retirement. Business brokers have the expertise in fields of finding prospective buyers, valuing your business and ensuring you get the right price, at the right time in a simplified transition that will not overburden your life.
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