Business Succession Planning

How to Maximize the Value of Your Business For Retirement

The biggest challenge facing “baby boomer” business owners is one that many haven’t even thought about yet: Retirement. 

Business owners invest a lot of time, effort and money into making their business a success, knowing that it represents one of their largest assets. For many business owners without a pension, the majority of retirement savings come from the eventual sale of their business. “What’s the best way to prepare for your company’s sale? How do you maximize its’ value and avoid costly mistakes? Are there tax saving strategies you could employ to help save thousands for your retirement? These are the questions that you need expert answers to” says Michael Naprawa, President of a Sunbelt Business Brokers in Nanaimo. 

Unfortunately, many successful businesses are not prepared and do not have a planned successor who is prepared to purchase and take over the operations. Sunbelt draws upon their global network of qualified and interested entrepreneurs to ensure you get what you deserve for your many years of hard work. Sunbelt specializes in selling privately owned businesses exclusively. They are experts in analyzing the value in business before putting them on the market, developing a sophisticated and professional marketing profile and finding qualified buyers with the right skills and experience to take over a business. Sunbelt can provide business owners with advice that can make a significant difference in the final value of their business. 

What makes Sunbelt truly unique in the marketplace is they work in complete confidentiality: employees, suppliers, customers, bankers and landlords will never know the business is for sale. Some business owners try to sell their company in the same way they would sell a house: publicly. The negative impact of public advertisement of a business can be significant to the value of a business. Once the news gets out, you could lose long-time employees, clients and suppliers—all of which will significantly bring down the company’s market value and ultimately, your retirement funds. 

Adding Value To Your Business

If you’re looking to sell a business, it’s critical to look at the value of the business.  A typical business really has two values.  The “academic” value is the one determined by a professional business valuation.  The other is the “true market” value.  The academic value is arrived at with a formula based on the firms’ hard assets, cash flow, industry averages and multiples.  The fair market value also takes those items into consideration, but then considers what buyers are really willing to pay.  For many small and mid-sized businesses hard assets like equipment, vehicles, land, buildings, and inventory may be limited.  For some small businesses there may be no hard assets at all.  Instead, their value is based on intangibles like employees, business processes, customer lists, location and business relationships. To maximize the fair market value of your business, it’s vital that you capitalize on those intangible assets.

Keep these important intangible assets in mind if you’re looking to sell your business.  They convey a value that financial statements alone do not.  If you are looking to sell, make a plan.  Start working on the intangibles well in advance of putting your business on the market.  For many business owners, they reach a point where they burn out and psychologically retire early, before a sale is made.  It’s important to work to keep your focus right until the sale is complete. Finally, when the time to put your business on the market arrives, consider lining up key specialists who will help you make the most of the sale – an attorney for legal advice; an accountant for preparing financial statements; and a business intermediary for packaging, marketing and selling your business. Remember, you only have one chance to sell your business, so you want to do it right.

“Buying or selling a business is, in most cases, one of the largest decisions people will ever make in their life,” states Michael Naprawa, owner of Sunbelt Business Brokers in Nanaimo, BC.  “In saying that, the business intermediaries at Sunbelt do everything in their power to enable both buyers and sellers to make the most educated decision possible.” 

 Sunbelt Business Brokers is the largest global business brokerage with over 300 licensed offices, 15,000 businesses for sale and 1,400 business consultants worldwide.  To see some of Sunbelt’s businesses for sale or if you are considering the sale of  your business, see www.sunbeltnetwork.com/vancouverisland or call our office at 250-751-7917 or toll free 1-877-289-0969.