Thinking about retiring soon? If you’re a business owner, you might be wondering what’s the best route to take when selling your business and preparing for the next phase of your life. Ark Financial is here to help you make the proper financial plans you need for your life. Because you own a business, your needs when approaching retirement are going to differ from an individual that is retiring from a corporate job.
When transitioning into retirement, there are many things that go into the transition. It’s important to start the transition before you’re actually ready to retire, so as to make sure you’re prepared. By applying these tips, you can make the transition a lot smoother. Keep reading to learn how you can approach retirement as a business owner!
The transition into retirement is a big one, to say the least. Especially for a business owner. You’ve been making big decisions all your life for your business, but decisions regarding retirement may feel like a whole different game. You can prepare yourself for retirement by creating a transition strategy for your business. We recommend selling your business one asset at a time, instead of your business in its entirety all at once. We understand that you have put a lot of time, effort, and financial investment into your business, and letting go of all that isn’t the easiest thing to do. Soften the blow and lessen the anxiety with a proper transition strategy.
Transition Tip #1: Get Organized
There are a lot of documents that need to be in order before you’re ready to sell your business. Start off by making sure all of your business operation and process documentation is up to date. Not only should you ensure your documentation is current, but also effective. You will want to confirm that all processes and procedures are well-documented and in the right place. This includes all financial statements and legal records. That way, the team that takes over your business knows where to find what they need in order to run your business smoothly.
Transition Tip #2: Set Up Leadership
Speaking of your new team, you want to ensure you have a good team to follow in your footsteps. If you have a manager that you’ve had to keep your eye on the past few months, it may be best to reassign them or replace them with someone you can trust to take care of the business properly in your absence. You want to sit down with your leadership team one-on-one and talk with them about their plans for the future. Your leadership team members should be committed throughout the transition period and beyond, that way the new owner has a good foundation to work with. Your leadership also needs to be a team that knows how to work without you. As your retirement approaches, you need to gradually make your business less reliant on you.
Transition Tip #3: Sell at the Right Time
One of the worst things you can do when it comes time to sell your business is choosing to sell it at the wrong time. Just because you’re ready to retire and hand off the torch, doesn’t mean the market is suitable. The time, effort, and money you’ve invested in your business shouldn’t be wasted on a poor market situation. Have patience when it comes to selling your business and wait for the right time. Base the sale of your business off how the market is performing, not your calendar. You also want to lay the groundwork for a sale ahead of time, in case you need to take quick advantage of a great selling opportunity. Selling with the market doesn’t always mean waiting – it could mean being prepared to make a last-minute sale.
Ark Financial is here to ensure your financial endeavors are successful – whether that’s with your business or your personal finances. Allow us to maximize your life – contact us today!