business owner a significant part of your capital will be invested in that
business and realising that investment will be central to your retirement
planning. To achieve that successfully it is essential that you have an exit
exit strategy depends on someone else being willing to invest in your business
in your place, so your first step has to be identify who that person will be.
you are in business with others, whether they are part owners of your business
or senior employees, they are the first people to consider. Not only are they most
likely to want to acquire your business from you but, if they are not
co-operative, they can be a significant barrier to anyone else doing so.
your exit with them and, if they are willing and able to acquire the business
from you at a fair value, agree the basis upon which they will do so.
you are already in business with them record that agreement in a partnership or
shareholders agreement. If not, consider taking them into business with you in
advance of your retirement and entering into a partnership or shareholders
agreement with them when you do, making buying you out when you are ready to
retire part of the deal.
you may know someone with a similar or complimentary business who could merge
their business with yours and, in due course, buy out your share. If that’s a
possibility, you might approach them yourself or, if you prefer to remain
anonymous until satisfied that their interest is genuine and they’ve signed a
non-disclosure agreement, appoint a professional advisor to make the approach
on your behalf.
neither of those options are open to you, you’ll have to find another buyer. If
that’s the case, take a good hard look at your business and ask yourself
whether or not you would be willing to pay what you hope to get for it in the
state it’s in.
you are in a market that others want to operate in, if your business is
properly capitalised, if your profits are as healthy as they can be, if your
relationships with key customers and suppliers are secure, if you have a good management
team employed on the right terms, if you’re in the right premises, if your
business is compliant, and, perhaps most importantly, if your business can
continue successfully without you, you’re probably in as good shape to find a
buyer as you are ever likely to be. If not, set about making your business as
attractive as it can be, deal with any issues that would put buyers off,
prioritise the others and deal with as many of them as you can.
At the same time, consider who is best placed to
market your business for sale most successfully. Speak to a few, find out how
many potential buyers they know already, check out their track record of
selling businesses similar to yours and ask what they think you should do to
improve your prospects of a sale. Once you’ve decided who to use work closely
with them over the coming months to prepare your business for sale. It can take
time, so start early, be patient and sustain your efforts in the business. It
will all be worth it in the end.