We read a lot about the ageing population and its potential impact on the economy but what does it mean for small business?
In business, typically, it takes a lot of energy and planning to get started and a lot to keep going and growing. Very few business owners start a business with exit in mind. It seems completely counterintuitive. You start with a dream and the tenacious passion to make it real and then you just want it to grow. But when do you start thinking realistically about what you want to happen when you retire?
For some, it’s too hard to think about. Many business owners might talk about funding a lifestyle but actually work has been their lifestyle. Straight up, they’d rather go with their boots on. But then what happens to the business? Economically it’s a waste – a waste of the business’ assets, client base, employees; it’s a waste of the dream and the hard work it took to make it real.
What’s your plan? What do you want to see happen? How much money do you need to retire? How do you start even thinking about all of this?
In search of a successor/successors
Are there family members working in the business who are interested in taking the business on? Do they have all the training and experience they need? What about your team or franchisees? Do any have management and leadership potential which could be developed further? It doesn’t have to be a single individual – there might be a couple of key people motivated to form an effective partnership with some serious buying power. Is this a good time to start a conversation?
Alternatives to exit
If the idea of selling the business and retiring to a beautiful lifestyle bores you to snores, don’t think about it in terms of complete cessation. If you find the right people, it might be feasible to keep an interest in the business and a slice of the decision-making. It could free you up sufficiently to discover more of the great lifestyle you could have had, if you ever had time to have a life. At the same time, you’ll be able to share the rich business knowledge you’ve built up and you’ll have the added satisfaction of seeing the business continue to grow.
Ready to sell
If selling is your best option, is your business ‘sale ready’? To achieve the best possible price, you need your business to be in the best possible shape when it goes up for sale. You need to analyse your business from the point of view of a potential buyer. Is there clear documentation on business processes and performance? Is your business performing at peak? What would it take to be ready for sale and what is the most realistic timeframe to achieve it?
These are all things we can help with. At the very least, we can help you to start the conversation and work out a plan.
Legacy Chartered Accountants has offices in Whakatane and Tauranga.