If you’ve had a successful career as a business owner, it might be time to finally hang up the business suit and retire. You’ve worked hard your entire life and have had a great past few decades of earning revenue for your company — so, now what?
Deciding to sell a business can be a difficult process. Here are a few important things to consider when deciding to sell a business and retire (or move on to another career or hobby).
Talk to your family
Since this is such a major life decision that will not only impact you but also your entire family, it’s essential that you sit down with your close family members and review every single aspect of the decision. It’s unfair to them to go ahead and make a major decision like selling your business without at least discussing the pros and cons that could come up as a result.
Selling your business and retiring can be a great move for your family; however, it is critically important to discuss the benefits and implications of such a major life decision.
Consult business valuation professionals
Make sure that you’re working with an experienced business valuation consulting firm prior to making any major selling decisions. A business valuation is the most accurate way to estimate the company’s value, both present and future.
In addition to its overall value, the likelihood of future cash flow plays a major role in a business’ valuation. The three primary business valuation methods are: asset-based approach, earning value approach, and market value approach. Your advisors should be well versed in each of these methods, as well as other industry-specific methods of valuation, if relevant to your case.
Research past and current market trends
You won’t want to sell your business if the market is in complete disarray. Take a look at recent business acquisitions and what other businesses for sale are being listed on the market for. Whichever industry you’re in, the market for selling a business can always fluctuate, so it’s important to not get discouraged if you can’t sell right away.
It’s important to at least monitor what’s going on in the market today and how business sales similar to yours turned out in the past.
Have an idea of what’s next
Though you and your family will be discussing what’s next for all of you, it’s important that you at least develop an idea of what’s next for you. What are your life goals, in terms of leisure, family well-being, social and community impact?
Some people end up regretting the sale of their business because they suddenly find themselves unoccupied with their time. Plan out how you’re going to spend all this newfound time, and remember to find a way to enjoy yourself.
If you’re in the process of deciding to sell a business and want to consult with a trusted group of advisors, contact the Aberdeen Advisors team today.