As confidence in the economy starts to grow, many Baby Boomers have thought the time may be approaching to sell their small business and get ready to enjoy retirement. There are a few important considerations any business seller needs to make before putting their business on the market.
Here are a few tips to help you get ready to retire from business ownership:
Ideally you should really begin to prepare your business for sale the day you open the doors, as a good exit strategy is always good business practice. You should always think of your business as an investment instead of as a way to get a paycheck because this mindset helps you to think more long term.
If you haven’t had an exit strategy from day one, it is never too late to start, and the sooner you do, the better. An optimum amount of time before a sale would be three years, as this would give you time to implement value-building strategies and have the effect of these strategies show up in your numbers.
If your business is larger than a one man shop, then you should make sure that you build and maintain a well-trained staff and a quality management team. A new owner will need a strong team in place to make for a successful transition, and having these key personnel already in place will be a strong selling point.
Unless your business is brand new, you may need to give the physical appearance an update. Just like cleaning, painting and staging a home helps the sale, so will a fresh coat of paint in your establishment. As brokers, the most common feedback we get from prospective buyers is that a business was dirty, so thoroughly clean or hire a professional cleaning company to do it for you. It is also a good idea to make any minor repairs that are necessary, as anything a potential buyer sees that needs to be fixed will come off the top of the price they are willing to pay.
Lastly, and probably most importantly, hire the right kind of people to help you sell your business. You will need someone, a professional business broker, who can properly market to buyers and help you decide on an asking price. Trying to sell a business is a full-time job, and you don’t want to take that time away from your business while it is on the market, because a lack of attention on your part will surely hurt the value of your business.
Are you someone who is getting ready for retirement? Do you need help getting your business ready to be listed or do you have questions about your options? Please feel free to leave us a comment or question here, and we will be happy to help you get ready for retirement.
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