Business planning strategies for your 50s
So you’re in your 50s and thinking about retirement – how do you make sure your business is in the best possible shape for a sale so you can retire in comfort?
For many entrepreneurs, their 50s will correspond to a post-maturity business phase and reinvention may be on the menu to craft your business into something appealing to a buyer.
It’s something I’ve gone through recently.
Time to innovate?
Through the late 90s and early 2000s my co-founder at PANALITIX, Rob Nixon, and I found ourselves first working together in a very entrepreneurial business training accountants.
We both left that business, but found ourselves working together again in 2007.
Rob had invented a product called CoachingClub where he brought accounting firms together, eight at a time, four times a year to spend a whole day together to train.
The focus of the day was accountability, learning, and sharing with a heavy focus on improving business performance.
During our business partnership, Rob and I have met frequently to talk about what we wanted our business lives to look like.
Rob often reminds me of one decision we made: that we would stop coaching when I was 50.
As much as we enjoyed it, the model had several issues, not the least of which was it was much too dependent on me and Rob to be a valuable, saleable asset.
Crucially, if we wanted to sell the business and retire at some point we had to make sure we weren’t the main asset.
Having made that decision, we then started to put the building blocks in place for what we would do with the business.
Over several years, we started to digitise our content.
What was once only in our heads is now repurposed as over 150 hours of e-learning content supported by cloud-based technology solutions.
We have also built a team to take on the critical management functions of the business.
New markets were also targeted by using a content and software as a service model, rather than a face-to-face coaching model.
We held the last CoachingClub business seminar in 2015, when I turned 50, and we are now the co-founders of a global content and software business instead.
Our monthly recurring revenue tripled in 18 months.
We now have a business that is much less dependent on us.
Crucially, we have re-purposed what we already had in the business to make it much more appealing to a potential buyer when the time is right.
So, what other things do you need to do to make sure you’re in the best position to go out on your terms?
As you enter your 50s, it’s time to think about your retirement. When do you want to put your feet up?
Have you created something you can sell?
How much do you need to live on in retirement — bearing in mind that once you have more time on your hands, you may spend more than you thought you would!
This is a conversation I highly recommend you have with your accountant.
Time to sell?
Who are your potential buyers? Can you identify them? Do you have relationships there, or is it time to start to form them?
Are there potential successors in your management team who may be interested in buying your business?
Have you dotted the i’s and crossed the t’s so that your business would cruise through due diligence without jeopardizing your sale price?
Do you even want to sell your business?
If you’ve created a cash cow, one option is to maintain ownership but put in place a team so that the business runs without you being there (and you just pick up a very handy dividend).
Think about your legacy
If you’ve created a successful business and you’ve been able to set yourself up financially, perhaps it’s an appropriate time to think about your legacy.
What do you want to leave behind? Can you contribute by giving something back?
After all, for many of us there is more to life than work, and if you made it through this far, then you have a genuine opportunity to help others.
I hope you have enjoyed this series, no matter where you are on your business journey.
One final tip: whatever stage you are at, do whatever you can to keep having fun. It’s a major key to maintaining your energy and success.