Knowing when to call it a day

Some do it early.

‘I’ve sold my business’, your business pal blurts out over an early morning coffee. ‘What?’ You didn’t even know they were contemplating selling up, let alone having the deal all done. Signed, sealed and delivered. How did that happen?

Your pal is in their early fifties. This is something that they have been thinking about for a long time apparently. The proceeds from the sale will give them a comfortable retirement. After a short ‘Earn out’ period where they work in the business to hand over to the new owners they will leave, hopefully to enjoy the rest of their lives.

The chat leaves you a bit unsettled. You don’t have a plan. You’re a business owner like your friend and a few years older. From time to time, usually when going through a difficult period at work, you think about slowing down and doing less. Then things pick up again, you get stuck in and the cycle continues. You need the money. You have your old employment pension which will start to pay out soon but there’s still the mortgage to pay off and savings are minimal.

So it feels like carrying on is the only option.

Some entrepreneurs do that. Literally keep going until they drop or ill health forces retirement upon them. The smarter ones have at least put some plans and an infrastructure in place so that the business can continue without them.

There is a saying that a business owner should start to think about their exit on the day that they start.

Essentially an orderly exit breaks down to a few choices:

• Business sale with the owner leaving immediately or after a period of time
• Partial sale or merger with the owner retaining a stake in the business and some ongoing involvement and income
• Retaining full ownership but with gradual handover to a new management team

Exiting well takes time to plan and implement. Those plans may change over time as the owner’s circumstances and aspirations change. 

We may not all be as organised and decisive as our fifty-something retiree at the start of this blog. But a little thought and planning in advance might help us get closer to the retirement we want.

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