M&A Reasons to Sell: Time to Retire
The M&A process is not an easy one, so you have to be motivated to go through it. Retirement is one of the top motivations of business owners who decide to sell their businesses.
The older some people get, the more they hear the siren call of Florida or Arizona. Or the Carolinas. Or . . . well, any place that doesn’t involve work sounds enticing. When an owner is considering moving on to the next phase of life, that phase of life often is fueled by the proceeds from selling his business.
So the question then becomes, “How do I know when it’s time to retire?” Here are some typical issues business owners consider when deciding whether to head off into the sunset:
Family: Where are the kids? At home? In college? On their own? Are you still supporting them, or are they financially independent?
Lifestyle: What do you want to do? Get involved with charities? Golf? Boat? Travel? Spend time with the grandkids? How much vacation time are you taking each year? If you’re spending increasing amounts of time away from the business and the business can operate without you (a good thing if you want to sell it), retirement time may be nigh.
Finances: Do you have enough saved to fund the lifestyle you want? Have you actually figured out that number with a professional planner, or are you just guessing?
As far as funding retirement, business owners usually have a rough, back-of-the-envelope number in their heads. Many times, that number is little more than a guess, and that guess often is a gross overstatement of what the owner really needs to fund his retirement.
Sit down with a qualified wealth manager and talk about exactly what you want to do in retirement. That wealth manager should be able to determine what you’ll need to retire and live exactly as you want to live.
Your personal drive: Be honest: How’s your energy and drive? Yeah, that sounds like one of those pharmaceutical commercials, but in all seriousness, are you still the go-getter who originally built the business? Admitting that your drive isn’t what it once was and that you’re putting aside your ego to think about what’s best for the business and your employees is no cause for shame.
If your position is no longer necessary to support the family, you have enough to retire, your lifestyle interests are increasingly outside the confines of work, and you’ve simply lost your mojo and desire for work, perhaps you’re ready to think about selling the business and retiring.