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Business owners who want to prepare for retirement face two big questions: First, is the business ready for sale (or transfer to the younger generation), and second, is the owner ready?
The former question is fairly straightforward: The basics for raising a business’s valuation include tracking and improving financial performance and recurring revenue streams, building up the management team, helping the business stand out from competitors, diversifying the customer base, and improving access to capital. Boosting these metrics will also shorten a buyer’s due diligence process and speed up the sale, or help launch a family member as the new owner. Many of these steps will take time, so it is essential to plan early.
