A recent survey of Small Medium Enterprises (SME) revealed the following statistics:
- More than 25% of business owners plan to exit their business with the next 5 years.
- 77% of business owners rated the sale of their business as very important for their retirement plans
- For 31% of them selling their business would be their main source of retirement income.
- However, 77% of these business owners do not have an exit strategy in place.
Too many business owners believe selling a business will be like selling a house. Unfortunately, this couldn’t be further from the truth. Far too often we speak with business owners who have not planned ahead and need to sell today. They fail to see that with careful planning and a well thought out succession plan they would be positioning their business for ongoing success as well as helping maximize the value of their business.
As a business owner you may already have an idea who would be a suitable owner of your business. It may be a family member, a business partner, existing management/employees or a third party investor. But have you thought about how much you need in order to retire comfortably? What are the tax implications of a sale? Do you need to hire someone to replace your skill set? Is your business ready to be sold? And lastly, but probably of most interest to all business owners, “HOW MUCH IS YOUR BUSINESS WORTH”?
In order to maximize the value of your business you need to start planning ahead, usually 3 to 5 years. You also need to surround yourself with a good team of advisors with experience in succession planning. Advisors you should consider speaking to include:
- Business lawyer
- Financial advisor
- Business consultant
- Business broker
Don’t leave your future in the hands of fate!