I initially wrote this article in 2013, it’s scary how the time can creep up on you, especially when you are past the official retirement and are planning to sell your business. So what’s different and how am I addressing this challenge. A few thoughts to consider.
If you are in business and are nearing retirement did you,
• Buy your business with the plan to build it and then to sell it?
• Or did you buy it to keep it and for a better life style?
• Or have you brought it and now only have a JOB = Just On broke
• Or are you thinking of retiring or in the age group that is nearing retirement?
If you are, then I suggest you read the following as there are a number of considerations you may need to think about for the sale of your business.
Statistic show that there could be as many as 10 -15000 or more baby boomer businesses due to hit the market in the next few years. Unfortunately, many of these will run smack into what he terms the “baby boomer bulge” where there will be many businesses for sale in competition with them. You only have to visit a business sales magazine to see the coffee shops and trade companies for sale.
A point of concern is that many husband and wife teams who have worked in their business for 20-30 plus years in preparation for retirement. Many may have a greater expectation of value of their business than what may actually be realized.
Too many people wait until they have to sell, rather than exiting their business when they want to. If you fall into this demographic, are you prepared or are you waiting for the day when you want to sell and hope for the best, unfortunately it may be too late.
If this triggers a call to action before it is too late then what is needed it to take stock of what you have.
The effectiveness of any business is not just about the annual balance sheet, although this will be one of the contributing factors in your business sale. The assets of your business are also the risk management processes, its documented business systems, its people, sales processes, clients, and its intellectual property, never discount these as intangible assets.
Another key consideration is the ability for future growth of the business for a potential buyer. A switched on experienced business advisor will be able to assist you with this.
Be prepared to swallow your pride and don’t take offence at the awkward questions, be very honest as it’s an important if you want to capitalize on all your years of hard work and sacrifice, you are not alone in this.
A word of warning. Don’t get hooked up with the warm fuzzy speak of a business advisor or business sales broker.
Why do I know this, we are now going through the very same process and have bitten the bullet to make what we have worked for 25 years work for us and for our future.
Our plan of action
- Our first commitment was to set a goal with a year and a date for five years out. 2nd August 2017. This now happening sooner than expected as the timing is right. (Those who aim at nothing in life, will always hit the target with amazing accuracy)
- For an understanding of the sales process, we researched and identified a checklist of what were the specific requirements for buying a business from the purchaser’s point of view.
This process is an eye opener but well worth the effort as it can take you from to a closed mind or a demotivated position to a position of “here are the facts, so let’s get up and go for it”.
A challenge you will encounter during this process is that you and your wife or partner were only accountable to each other, if agreed actions slipped they were often forgotten about.
The answer, contract another party to sell your business for you
- WHY: One of the biggest mistakes you can make when selling your business is to try to sell it yourself. You have to step out of this process as you are too emotionally involved. Be prepared to pay a commission but as long as you have the right person.
We have invested in such a competent and experienced person who has “been there and done that” and also involved our accountant in a complete review of our position.
Already, this is paying dividends with a greater piece of mind and potentially receiving a greater return on the sale than anticipated.
Its early days but I can assure you that the horizon is looking brighter using a competent third party in this sales process.
Entering a third age
So you have sold your business now what, mow the lawns, paint the house, hit the road and live the good life, these are one of the many questions you will have to consider.
But what about the other investment that you may not have considered?
The bank of accumulated life, trade or professional knowledge that is just sitting there to be reused.
Have you ever considered that you may be entering your third age where you can capitalize on this and help others to succeed instead of retiring completely and to wait meet your maker?
We may be grey, we may be silver but as they say, you are only as old as you feel.
Age is only a number and the difference is the attitude what lays between ones ears.
Health is a big factor and this may be an inhibitor for some things but there are other options.
What we baby boomers have and banked over the years without realizing it, is all that experience and wisdom, now are you ready to spend it?
So how will you spend it, that’s the challenge when you should also be considering when you get ready to sell your business?
From the MSCNewsWire reporters desk by Gordon Anderson - Friday 2 September 2016