GETTING INTO BUSINESS is not difficult, even if you do have to make some serious decisions and commit some capital and effort.

Making it in business is a bit more difficult because so many businesses fail in the early years. However, getting out, moving on, and riding off into the sunset can be the most stressful and costly phase of all.

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This is a typical business cycle. Most owners tend to sell at point D. However, with a little planning, selling at an earlier point, say point C, would be less stressful and much more profitable. Most owners overvalue their businesses, and, if sale proceeds are a big part of expected retirement capital planning, they are heading for a major disappointment.

To get the best price, you need to groom your business for resale. This way, you will lock in the value and maximise the return for all your time and effort over the years. Developing your business for resale can mean significant dollars for you. Like most things, this will need some investment, but each resulting extra dollar of profit may mean three or more extra dollars in additional sale price. The bottom line is that you can lock in huge value by proper planning and prudent expenditure. The trends say don’t delay.

The ‘Baby Boomers’ are going to be selling their businesses soon, business owners are ageing, the work force is maturing and buyers will be fewer in numbers. A business broker once said that 90% of business owners who approach him have unsaleable businesses, which he won’t handle, in their present states. Too many owners are their businesses and who would buy a business without the main asset? Or where the main asset will leave in six months?

 Succession planning applies to YOU as it does to all business owners. Who should you approach and who should be involved? Your accountant is ideally placed to orchestrate the service providers including lawyers, IT people, bankers, financial planners, business brokers etc. Here is the strong message. Get it right and you maximise the dollars and ease the stress of retirement. Get it wrong and you will find that the lost opportunity brings the converse.

You should set yourself a timeframe with your accountant, who will show you the steps you need to take to make this a success. This should henceforth be part of all your business planning. Call us. We help people get into business, help them stay in business and then help them get out successfully.

Author :- RSM Prince & Partners