For many business owners, selling the business is a big part of funding their retirement - but it can take several years to groom the business to get top dollar. For those looking to move on in the near - or not so near - future, Phil Astley has some sound advice.
Always start with the end in mind - or so goes the well-proven advice over many years. Yet when it comes to our business - the thing that can occupy more of our time and mental energy than anything else - this advice sadly too often neglected, until we have to deal with it. It is said it takes five years to prepare a business for sale at maximum value. And that value can make a big difference to funding retirement.
Over the next decade, New Zealand will see the single largest change in business ownership in its history as the baby boomer generation transitions into retirement.
The question you need to ask yourself is: have I planned adequately for the long-term future of my business?
A recent survey conducted by the ASB Bank estimates that one in four business owners are looking to retire in the next five years. This will have a dramatic affect on the NZ business landscape. Perhaps you think you’re too young to think about retirement or maybe you already have a plan for the future of your business. But does your approach offer the best plan for your own future?
Gone are the days when the family business simply passed on from father to son (usually) with little change in the essential nature of the operation. Nowadays, the New Zealand business scene is viewed as a great place to buy up and develop businesses in mergers and acquisitions with the business owner receiving very attractive premium prices.
Indeed, the current market in trading businesses is booming and it looks set to expand even further as the baby boomer generation retire and eagle-eyed investors seek to buy up businesses with potential.
And it’s not just the large firms that are being targeted. When investors are looking to buy they are targeting businesses that show areas where growth and development can take place and where they (the investors) can add value.
The key, as a small business owner, to making your business an attractive proposition is to have clear strategies and products that demonstrate a rich potential for growth and development. And even if you’re not yet approaching retirement age, developing clear goals and maximising the value of your business is a great way to ensure that your business continues to thrive and grow.
In fact, it makes great sense to view your business as part of your retirement scheme. Who knows, with good planning and sound advice you might even be able to enjoy a very early retirement.
- Exiting your business