Just about everyone will retire from work at some point in time. For entrepreneurs and small business owners, it takes a little more planning than for employees. As part of your ongoing strategic planning, it is helpful to occasionally consider when and how you will wrap up your business life.
As you consider when you want to retire, think about whether you will be able to sell your business. If you want to sell it, who will be the mostly likely buyer, an employee, a colleague or a competitor?
If the exit plan is to sell the business, then planning is needed to prepare the business for sale. Good financial records will be needed to help prove the value of the business. Good customer records are also helpful for the same reason.
If you don't think someone will purchase the business and you plan on shutting it down instead, then it is considerate to let your employees, customers and vendors know well in advance so they can make plans as well.
Even if you hope to sell your business when you wish to retire, it is not a good idea to have this be your sole source of retirement income. It is always a sound idea to save during your working life and have any sale proceeds be a bonus. We have seen business owners who have been unable to retire because no one was interested in buying the business and they didn't have adequate savings. Sometimes this is due to the economy as many people may be unable to get lending to allow them to purchase an existing business. Sometimes this is due to poor record keeping by the business owner so potential buyers are uncertain as to the profitability. Sometimes this is due to the nature of the business, as it is really successful due to the owner so a buyer would not be able to purchase the company and run it with the same level of success.
Planning for the future is important for anyone, but small business owners need to take the additional time to figure out how it will happen for them and their company.