When you talk to other people about selling your business, you will get plenty questions like, why? How much? What are you going to do now?
People are inquisitive by nature, so don’t be offended by peoples comments. Just be honest and tell them you’re retiring!
You may even get some people offering advice on how to sell your business for a nice profit. While this can be helpful, its always best to do your own research to find out what will work best for your business.
Ultimately you want o fetch the highest price possible, allowing you to retire in a financially, comfortable and even wealthy position.
What Defines a Wealthy Position
Everyone wants to be able to retire wealthy. Not having to rely on a pension during your ‘golden’ years will allow you to live a very comfortable life.
Selling your business to retire wealthy includes:
- Liquid income to enjoy life;
- Regular income to pay bills;
- Growing income to be able to make good on retirement plans.
A big part of retiring wealthy depends on what you do with your money after you sell your business, but everything starts with the price you get when your business sells.
Instead of focusing on just making a profit, you should look at how you can become wealthy when the transaction is over.
Consider Staying Involved
One of the ways you can get wealthy by selling your business is to stay involved in the business after you have sold it. For example, you can sell for a slightly lower price, but part of the deal would be a guaranteed consulting position that pays you a monthly salary.
You would be on hand to help answer questions and give input on business decisions to help the business to continue to grow.
Some provisions you should consider when negotiating this type of agreement would include:
- Limiting the amount of hours you would work;
- Choosing your own working conditions;
- Including annual cost of living increases.
This approach is unusual, but it is sometimes used in various industries.
For example, a marketing professional who spends years establishing a marketing firm may sell the firm, but also negotiate an agreement to keep their name attached to the firm because the name offers a strong presence in the industry.
Part of the agreement is a monthly consulting salary that helps to significantly increase the value of the sale over time.
Execute Comprehensive Due Diligence
If you want to sell your business so you can retire wealthy, you need to maximise your sale price. If you want to get the best return on your business sale, then you need to offer maximum value that buyers cannot deny.
To do this, your pre-sale evaluation process must be extremely comprehensive and involve methods that most people do not utilize when they are selling a business.
You need to hire a business evaluation team that looks over everything from your vendor agreements to your building lease. Are there terms in those agreements that decrease your businesses ability to be profitable? If so, then you need to renegotiate those agreements or find new vendors.
1. Could you be buying products at lower prices or get better returns policies from other vendors? Anything that decreases your company’s buying power will decrease the value of your business and cost you money in the final sale.
2. If your lease does not allow your business to grow properly to maximize future profits, then you need to renegotiate that lease or alter your facilities situation.
3. Would buying a building significantly increase the value of your business? If so, then start the process and do everything you can to maximise the sale of your company.
Accept The Right Offer
Many business owners tend to jump on the highest offer they get in the hopes that the final sale of their business will make them rich. But if you do not pay attention to the terms of a sale, then you could wind up losing a great deal of money when the transaction is finalised.
As you look at the bids in front of you, consider how those bids will be financed and what kinds of conditions the buyers are asking. The bid that looks to be 15 per cent higher than the others might be unstable when it comes to financing and the end result and could be that you have to pay a small fortune to lawyers to get the mess corrected.
As you evaluate the offers you are getting, be sure to look at each offer on its own merits and then put them together into a list of highest to lowest. It could be that the second highest offer is the one that will make you rich, while the top offer could wind up jeopardising your retirement.
Remember That Business Is Business
Despite all of the advice that can be given to help business owners sell their companies and retire rich, many get emotionally involved in the process and make the wrong decisions.
You built your business by focusing on the best possible ways to maximize profits and negotiate deals that benefit your company, now you need to take that same approach when you are selling that very same business.
As you prepare to sell your company, you need to stay focused on the business aspect of the process and remember that you are trying to finalize a deal that will make you wealthy. The years you put into building your business make some great memories, but you should not allow your emotional attachment to those memories to ruin your chance at a wealthy retirement.
If you want to retire rich, then you need to stay focused on the process that surrounds the selling of your business. You need to put emotion aside and make the changes that will add value to your business, and then make the right decisions that will bring you wealth and prosperity in your retirement years.
What businesses have you owned? Have you sold them now?