Anyone who has been to a large event such as a football game or concert at Wembley Stadium will know that heading for the exit can be a slow and crushing experience all the way to the tube station
As a small business owner, at some point you will stop either through a takeover, retirement or, worse, a business failure. But for the majority of business owners, retirement is the main reason for stopping work.
But what is the best time? When should it happen and how do we go through the process with the best possible outcome? For many, as the business has developed it may have become a very valuable asset; disposing of it can therefore have a potentially big impact on your life. So have you prepared for this event? Every business from the early beginning should have in place an exit strategy.
A business owner, as they near retirement, will be looking at it from their own perspective. But how will this be seen by employees and key customers? Having a clear plan means that employees will know what is happening and customers will also see that things are in place to ensure ‘business as usual’. One of the key components of an exit plan is to avoid key people leaving as they foresee rocky times ahead. If you are looking to sell your business its value will be affected by uncertainty in this area.A good organised business will be much easier to dispose of. So be prepared.
What’s the plan?
For most, the decision centres around can we sell or do we just close. The latter option may be the only one if you have a niche consultancy. It may also be the only option if you have not planned it correctly. If you are the sole driver in the business its value may well just cling to you.
However if you want to sell your business, you need to plan this process. Will you sell it to a competitor, merge with a similar business or possibly sell to your employees?
To achieve a good price you need to know just where the value is coming from, which will be a combination of your customers and your team who are actually doing the work.
Selling to employees is often not as valuable initially but you can always retain a small stake in the business and benefit from their continued and hopefully highly motivated efforts.
But this can’t be organised over a weekend; it needs to be thought through and implemented over a much longer period of time.
As part of this exit strategy, you also need to take into account the amount of income you will need. So not only should you be thinking about the business exit strategy, but have you set aside funds through pension or other savings vehicles and finally, what are you planning to do in retirement?Our next Accelerator Club session on the 16th November will be looking at all of these things. Free to attend, you can book via the events page of our website, through Eventbrite or email email@example.com. Starts at 8.00am with special guest, Keith Mullins from Lighthouse Wealth. All are welcome.
Alternatively call us and arrange a one to one with our directors.