For the vast majority of business owners, the dream scenario of selecting a retirement date and relying on their superannuation from that date onward is a fantasy. Without proper planning, this will not be possible.
Before any exit planning is started quite a few questions need to be considered. Here are a few sample questions:
When would you want to stop working?
What do the other owners / key individuals within the business want to do in the future?
What do you want to do in your retirement? Stay on as a business consultant or buy yourself a villa in the sun and take up golf?
Which exit plan will yield the best results for you personally and for the business?
· Are you going to withdraw gradually so that someone else can be groomed to take your place or are you going to withdraw completely on a specific date?
Forty five per cent of business owners claim to want to retire early. However small businesses owners tend to work longer because they gain personal satisfaction from running their own business. So although these owners may exit from one business, they are likely to involve themselves in other businesses well beyond the conventional retirement age.
As the business owner, you are the only person who can answer the above questions. The answers will form the basis of your exit planning strategy.
However, you must also recognise that external factors beyond your control may well get in the way of realising your objectives. These include your health, family members and any business partners.
You therefore need to adopt a flexible approach so your plans can adapt to the aspirations of others, changing market conditions and personal circumstances.
You only exit a business once. Your chances of achieving a good deal will be considerably enhanced by using a good team of advisers. These advisers can help you understand the marketplace and the real value of your business, and help to negotiate the best price.