You want to retire but you are in no hurry. There is no succession plan and you want to slowly back out of the business. Do you do it quickly? Do you wait a few years or sell your business now? Which one will be best for you?
There are many reasons for retirement, health is a major contributor, getting tired of doing the same thing day in and day out, wanting to move on to a new challenge, economics or you just want to put your feet up and enjoy retirement. Depending on which one you fall into, there are several key items to consider.
Health – if your health is failing, selling immediately is a requirement. If you have time then you need to prepare your business for sale in an orderly way but if someone passed away suddenly or had a heart attack and can no longer continue operating the business, you may have to sell quickly to preserve any equity that you may have. Many years ago, I was aware of a 35 year old who looked like he was in perfect health had a heart attack and died. He had no will therefore the bank froze his corporate bank accounts until the courts decided who his executor and beneficiaries would be. The business needed to pay the staff and suppliers but it would take months to resolve the legal issues because he had no will. As a result all the employees left and the business collapsed. It took too long to rescue the business. It pays to have a second signing officer in case something happens to the owner. That way, the business can continue even if the owner is not physically present.
Some people are builders, they like to take a business, improve it, grow the business and when it hits a plateau and no longer can grow, they want a change. As a result, they want to sell their business now and do not want to wait. Their business probably has continuous profits, unlikely to grow therefore now is a good as any time to sell.
You want to retire. Do you have any hobbies? Do you have something to do after you leave the business? I have seen business owners put up their business for sale but when an offer comes in at their asking price, they turn down the offer. They are not ready to retire and sell the business. Sometimes, they are years away from mentally letting go of the business, others are ready now. If you want to retire in a few years, you have time to prepare your business for sale and can do many different things. Please look at the December 2 and December 15 for what to do to prepare your business for sale.