Selling your business as part of a retirement plan may cross the minds of many business owners. Dave Williams, retiring Regional Managing Director of 1825 North West Regional Office, shares his experiences of selling his business Jones Sheridan to 1825 as part of his long term retirement planning.
Retirement planning: selling your business
While every transaction is different, the underlying reason that many business owners decide to sell up can be quite similar. Regardless of the size of the business, the industry or geographic location, at some point most of us end up deciding it’s time to move on to the next chapter.
Having sold my business Jones Sheridan Financial Consulting to 1825 back in November 2016 and taking up the role of Regional Managing Director, I understand that it can be difficult to release the reins of a business you’ve spent years building up. However for me, and likely for many other business owners, making that decision was a fundamental and integral part of my retirement planning.
It meant that my assets were no longer tied up in the business but also that, after Jones Sheridan had successfully transitioned into 1825, I had the time to ponder the question what next?
More time with family? Absolutely. Taking a course? Maybe. I might even learn to play the drums…
Who knows, but deciding to sell was the first important step towards planning my move into the next stage of my life, on my own terms, at a time that’s right for me.
An exit plan can be a sudden thing or it can even take years to complete. Here are some key considerations that could help to make the process as smooth as possible for all involved:
Choosing the buyer
Times of change can understandably bring levels of uncertainty so finding the right person or company to sell to is an important part of your exit plan. It could affect the business you’ve worked hard to build as well as the clients and employees who have supported you. So making the right decision means any affect felt is more likely to be a positive one.
For me, choosing 1825 was absolutely the right decision. Choosing a larger parent company with similar core values, allowed a confidence that we would not only continue to provide the best possible service to our clients, but could in fact also lean on the relationships and resources of 1825 in order to further enhance our offering.
Choosing the right person to take over the retiree’s role
Many business owners want to see their business thrive even after they have stepped away – and that means putting the right components in place to ensure success. Having a buyer that’s the best fit for your company can put you in the right waters (so to speak) but if you want the business to continue to grow after your departure you also need to find the captain.
To that end exit planning goes hand in hand with succession planning for many business owners and entrepreneurs.
Speaking for myself, it was absolutely vital to find the right person to take over my role before I could step down. I’m delighted to have found that person for the job in Mike Cullinane who took over from me as Regional Managing Director in August and am grateful for the recruitment opportunities that can potentially be opened up as result of joining a larger business.
Selling your business as a retirement strategy
There’s a lot to consider when selling your business; who do you want to sell it to, when is the right time, what’s the business worth, are there any Capital Gains Tax considerations? Just making the decision to sell your business can be tricky. Yet for many business owners it’s a fundamental requirement in order to live the life they want in retirement.
Whilst it’s true that selling a business can be a great way to bolster your retirement planning, relying on this alone could potentially be a very risky strategy so having a diversified plan for your retirement funds can provide a safety net to guard against any pitfalls.
When the transaction is done and succession plans are in place, the only thing left to do is to step away.
Of course when you have built up a business, I don’t think you can ever truly walk away, I will stay in touch with my good friends and will continue to take an interest in what’s going on. But it’s also time for me to look forward…so where are those drumsticks?
Thinking of selling your business?
Selling your business will likely be one of the biggest decisions you will make.
It’s worth seeking expert support to ensure you have a proper plan in place for your finances as you transition into retirement. A proper plan can not only help you achieve your retirement goals, but can give you the peace of mind to know that you’ll have enough money to live the life you want.
If you’re thinking of selling your business and could benefit from this sort of support, get in touch with an 1825 Financial Planner today to find out more.
Laws and tax rules may change in the future. The information here is based on our understanding in December 2018. Personal circumstances also have an impact on tax treatment. The information in this blog or any response to comments should not be regarded as financial advice.