When and how to sell your business for retirement
Knowing when and how to sell your business for retirement can be difficult. Since there is a balance to be had between when your business is most valuable versus when you personally want to walk away from it, it can be tricky to find the perfect time to sell. That is all before finding a way of how to sell it too.
Additionally, getting a business into the best shape possible so that you achieve its highest price is tough too. There are so many factors to think about – the finances, the legalities, the personnel and the tax implications are all essential elements that need to be organized before a sale. Yet it is imperative to have them sorted before a sale is even feasible.
Here, we look at pointing you in the right direction on how to sell a business as well as highlighting how Latona’s can help sell your business for retirement in an efficient and timely manner.
When to sell your business
Selling your business for retirement doesn’t automatically mean selling your enterprise the moment you hit the government-declared age (especially as this is set to increase over the next few years). In fact, there really is no right age to retire – though there will be a right time that is particular to you. Instead, selling your business for retirement should be about attaining the maximum possible monetary value while also taking into account your personal wants and needs.
For example, if working for a year past your retirement age birthday enables you to reach a much higher sales price due to a successful restructuring or cost saving exercise, it is probably worthwhile doing so. Unless of course you are happy to walk away from that extra cash. This could be because you value the extra time for your retirement more highly than the better price. Equally, if you can gain a higher price prior to retirement age, then can you afford to retire earlier or will you still need an income?
Know your exit strategy – keep selling your business in mind
Because there is no right age to sell your business for retirement, it is always best to know what your exit strategy will eventually be. The reason is that your company will naturally be in a better shape and direction when it comes to the moment that you do want to sell. It will keep your business focussed on achieving targets and it should consequently reach a higher price when it goes on the market.
Plus, when considering your exit strategy, it is essential to ask yourself, do you know what you are going to do after your business sells? It may sound obvious to some, but it can have a massive bearing on when and how you sell your business – if you sell it at all. It is necessary to dedicate time to thinking through what you want your life to be and ultimately figure out how much that will cost.
In reality, once you have sold your business – can you afford to lead the life you want to lead? If the answer is no, you will have to think about ways to increase the price of your business and therefore improve your company to justify the added premium. Or, think about whether you will need another job or have to start another company. If it is the latter, how much money will you need to invest in your next start up and how long will you have to go without an income before you start to see a return on your initial investment.
Of course, it can also be the case that you don’t want to sell up – especially if you founded the business. As a result, it is naturally hard to let go, but it is still worthwhile having an exit strategy nonetheless. You won’t be around forever and you need to think about what will happen to the company when you pass away. The impact of losing a founder cannot be underestimated. There are issues such as key person risk or inheritance implications for your family. If you have an exit strategy in place, these issues should be minimized, if not eradicated completely.
How Latona’s can help sell your business
At Latona’s, we can help position your company so that you attain the best price possible upon its sale. Over the years we have closed a range of deals that start in the tens of thousands and go into the tens of millions. We therefore have a wealth of experience getting businesses into shape to make them an enticing prospect to outside investors.
Plus, we have the platform and mechanisms in place to help find you those investors. We have thousands of prospective investors on our books that we can match you with to find the best fit. To that end, if you are looking to sell your business for retirement, we are the place to start. We keep all parties informed throughout the process so the transaction is as smooth and painless as possible. Our procedures ensure all information is secure and safe. All buyers are asked to sign an NDA to safeguard your details. The result is selling your business is not an onerous task, simply a profitable one.
If you want to find out more about how Latona’s can help sell your business, contact us now!