When will you be financially and personally ready to retire from your business? Unsure? Many business owners often underestimate exactly what is involved when planning their exit, lacking an understanding of what they need to do in advance to ensure both the business and their mental wellbeing is in tip top shape for when they decide to leave.
Exiting a business that has been built by years of hard work and dedication can be emotional. At CMC, we understand the emotions business owners go through when thinking about life without their business, but it is essential that you take control of your exit so you reap the rewards of your hard work. When you are ready for retirement, you don’t want to be in a situation where the potential profits from your business are not enough to support your future lifestyle. So, what can you do to prepare in advance?
Preparing to leave your business
A good place to start is to ask 2 key questions to help you think about your ultimate objectives, personal/family situation and financial requirements.
- Are you financially ready to leave and support your future lifestyle?
- Are you mentally ready to leave the business?
This insight will guide you in positioning your business accordingly and developing a unique exit strategy in line with your goals and aspirations. Mental preparation for retirement is an important factor when making this life-changing decision and can be harder than you expect. Using this approach will aid your thinking and progress in all areas.
To prepare financially you need to accurately assess how much money you will need to maintain your lifestyle. This entails understanding your dependency on your business not only for income, but for benefits such as car payments, health insurance, and other lifestyle expenses. Determining what you need versus what you have will help you choose an exit option that can bridge that financial gap.
To help your decision, ask yourself:
- How involved are you in the day-to-day operations of your business?
- What will you do with your time when you are no longer running the business?
- Do you view your business as a ‘job’ or as an ‘investment’?
- Do you have family that may wish to take over your business – do they have the skills or ambition?
Answering these questions will really help you decide if and when you may personally be ‘ready to exit’ your business.
How are you feeling now? Ready to start planning your retirement?
CMC can help you address the questions above and have experience dating back to 1989. Get in touch via the form below to arrange a free confidential appointment with one of our Business Advisors located close to you. We have practical experience of working with business owners and provide a personalised service to improve the value of businesses in preparation for the owner’s exit or business sale.