Tax season is over. You have a good idea of where the company is headed this year and what needs to be done to finish the year successfully. You have shared the plan and given your employees their marching orders. Now what? Well, while the numbers are all fresh in your mind, now may be the best time to start preparing for your eventual exit from the business, especially if you’re within five years of retirement. Here are some tips that can help you in this process:

  • Know your numbers: It’s crucial to understand whether you have accumulated enough wealth to support your lifestyle when you retire. You should not only be familiar with your business operational numbers but also your retirement numbers. Therefore, it’s important to measure that number for a certain period, such as 5, 10, or 20+ years.
  • Stop doing the work: It may seem counterintuitive, but you need to stop doing the work! To make your business an attractive investment, potential buyers must be able to see themselves at the helm operating it as well as or better than you have. Therefore, it’s essential to add the right managers to the right positions so that you’re no longer needed.
  • Plan your exit strategy early: Don’t wait until you’re ready to retire to start thinking about how you want to exit your business. A clear plan is essential whether you plan to sell to a buyer, pass it down to a family member, or dissolve the company. Consider consulting with a business attorney, your m&a advisor, or a financial advisor to help you develop a solid exit strategy.
  • Make your financials clear to investors: The last 3-5 years of your financials should be transparent to attract potential buyers or investors, It’s important to ensure that your accounting is in order and that your financials make sense and follow Generally Accepted Accounting Principles (GAAP) standards. If you don’t have in-house controllers or audited financials, consider consulting with a CPA familiar with the M&A process.
  • Evaluate your business’s value: Knowing your business’s value is crucial in determining how much money you’ll need to retire comfortably. There are different methods to calculate your business’s value, such as using a multiple of earnings or assessing the company’s assets and liabilities. It’s important to get an accurate picture of your business’s worth, so consider hiring a business valuation specialist.
  • Consider your post-retirement lifestyle: Retirement is not just about leaving your business behind; it’s also about embracing a new lifestyle. Take some time to envision what you want your retirement to look like. Do you want to travel the world, spend more time with family, or pursue a new hobby or passion? Make sure your retirement plan aligns with your personal goals and aspirations.
  • Take care of your mental and physical health: Retiring can be a stressful and emotional time, so it’s important to take care of yourself during the transition. Make sure to maintain a healthy diet and exercise routine, and consider seeking support from friends, family, or a professional counselor if needed. Taking care of your mental and physical health will help ensure a smooth transition into retirement. (Source: Mayo Clinic)
  • At Plethora Businesses, we are here to help you on this path. We understand the importance of preparing for your exit from the business. As such, we can prepare a complimentary valuation of your business to give you our opinion of its value. If it meets your expectations, we can introduce you to buyers who are fully funded investors and are motivated to buy a company like yours.

    Please feel free to contact us or schedule some time to chat.

    David Chavez


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