Serial entrepreneurs will know it takes time to sell a business.
However, when it comes to your final sale, the added task of retirement planning means things can move even more slowly.
It’s a big decision that shouldn’t be rushed so the sooner you can start planning, the better.
Most of our clients start to think seriously at least 3 years before their departure date.
This gives plenty of time to make any changes in the business and sort out your personal finances.
What’s your dream retirement?
Thinking about the life you want once you’ve downed tools is perhaps the most important step when leaving your business.
Before you focus on the business you should think seriously about your personal finances.
Some broad questions to consider are:
- What do you want to do next?
- How much money do you need?
- Do you want to stop working completely?
- Do you want to retain a stake in the business or leave completely?
Once you have an idea of your new lifestyle, you can think about how you will fund it.
Your business will undoubtedly play a huge part in this but you should also look at the following to get a complete picture of your personal finances:
- other sources of income (such as a part-time job).
Taking all this into account, you can draw up a forecast of your retirement income. Compare this to your estimated expenditure to see where there are shortfalls.
Armed with this information you can begin to plan the best way to use your business to fund your retirement.
Do I have to sell up?
Leaving your business isn’t limited to simply selling up and moving on.
One option is to retire but keep shares. This allows you to stay involved in the business and, if your company remains profitable, you may receive income through dividends.
However, check your articles of association or shareholders’ agreement to see if this is possible as many companies require people to sell their shares if they stop being an employee or director.
Sole traders with employees often decide to convert to a limited company.
This is often part of a long-term plan to grow the number of shareholders and gradually take more of a back seat in the business.
What’s right for me?
There’s no such thing as a one-size-fits-all approach to leaving your business and it shouldn’t be a rash decision.
We are here to share your ideas, listen to your concerns and guide you through the process. Get in touch to discuss your situation.