To retire off the back of selling one’s company remains one of the quintessential dreams of any entrepreneur, but such an outcome does not simply arise from having a successful business. Some owners delay the process of succession until it’s too late. So, when is the right time to retire?
Many businessmen who founded their company in the 80’s find themselves stuck due to their heirs not wanting to continue on with the business, either because of their varying interests or because of family conflicts that need to be avoided. Other times, it’s the owner’s son or wife that has a conflict with company partners or the directive team and in turn, the businessman anticipates a conflict once he is due to pass the business on.
When is the right time?
Like everything in life, preparation hold’s 99% of the key to success. If the business owner observes that his family members are unfit to continue the business, the owner must be proactive in the search for a buyer.
It is a big mistake to wait for a buyer to appear. It is unlikely to happen, and when it does , it is rare that they are the best fit. More often than not, it is likely that they will bargain an undervalued price in an aggressive negotiation, all under the premise that you do not have any other alternative.
The risk that an owner takes is that as time passes, the will to continue the business wears off, and this in turn transitions into the rest of the team. This means that the business will begin to deteriorate, as the leader is becoming less interested in the project, whilst emitting less energy and enthusiasm for the company. The employees are the ones that suffer the consequences.
Why you need a plan
Just like athletes, businessmen need to know and admit to themselves when it’s time to retire. The difference here is that unlike an athlete, a business owner must have a long-term retirement and succession plan in mind, potentially several years before it is time to retire. Selling a business is a professional process that takes time, and there is nothing more important in a business’ professional’s life than that of their company’s sale.
As Saint Paul says in his letter to Timothy: “I have fought the good fight, I have finished the race, I have kept the faith.” It is crucial that a business owner prepares his retirement in such a way that he can finish selling his business in a strong condition. He will have the satisfaction that his mission was accomplished and to have placed the cherry on top off a process that creates value and ends in a magnificent operation.
Finding not just any buyer, but rather the buyer that will create the most value for your company; one that gives off the best image, adequately manages communication, classifies business by what will bring the most value and enjoys good alternatives with other possible buyers. It is crucial so that the operation has widespread and ongoing success. If you are ready to retire and need to sell your business, don’t hesitate to contact us!