In the latest episode of The Selling Successfully Podcast, Portage Founder and Partner Jim Friesen was joined by Portage Partner and Head of Valuations, Ryan Buist, to remind sellers that there’s much more to consider than just numbers when it comes to retirement. There’s an introspective process they must undertake to truly assess their level of retirement readiness.

Here are the 5 key takeaways for those thinking about or ready to sell.

1. Ask the right questions.  

The topic of retirement generally brings to mind three typical questions:

• Am I ready to retire?
• How much money will I need?
• What does retirement mean for me?

Although important questions, they don’t go deep enough for the average person looking to sell their business and begin that next chapter confidently. 

Business owners are encouraged to take their thinking and planning a few steps further by considering the following questions:

• What should I do with my business? If you’re not a seasoned seller, you may not be aware of the breadth of options available depending on the situation. 
  • Selling to a strategic buyer
  • Selling to a financial buyer
  • Management Buyout (MBO)
  • Employee Stock Ownership Plan (ESOP)
  • Merger
• Who will take my place? Those who have created a legacy and are invested in their employees want to ensure they’re leaving their hard-earned names in capable, caring hands. In-depth buyer screening exists for this exact purpose. It is built into the Portage process early on to evaluate capability and compatibility to make sure the buyer is a good fit and the deal satisfies the seller’s criteria. 
• How much is my business worth? The importance of a professional business valuation cannot be underestimated. Portage has chartered business valuators on staff to provide an accurate and unbiased assessment of a company’s worth, aiding informed decision-making for stakeholders, investors, and management.
• Is my business even saleable? Part of our job is to answer this question for you. Our step-by-step process including appraisal and valuation, market preparation, and due diligence will provide the data needed for this assessment. 
• How much do I need to sell for to maintain my lifestyle? This is a question that should be handled collaboratively with your deal team, specifically your wealth management or financial advisor and M&A advisor.

2. Get processes in place.

Sellers often harbour the misconception that a strategic buyer will effortlessly emerge to acquire their business. However, adopting this assumption may limit potential opportunities. Implementing robust processes that facilitate the seamless operation of the business by any buyer, regardless of their level of experience, not only broadens the pool of potential buyers but also enhances the overall appeal of the business. This strategic approach increases flexibility, maximizes options, and ensures a smoother transition for the new owner, thereby optimizing the chances of a successful and lucrative sale.

3. Avoid an identity crisis.

The American Institute of Stress ranks retirement #10 on a list of life’s most stressful events. A time that is thought of as rewarding, freeing and connective can trigger feelings of stress, anxiety and depression. Our vocation forms a part of who we are and gives us purpose and community. Without it, we can lose our sense of self and experience isolation.

It’s no surprise then that retirement isn’t a rosy prospect for all business owners. Fear of the unknown can be a frightening reality for those who leap without a trusted safety net. 

Common anxieties and concerns such as lack of financial security, boredom, loss of identity and even spending more time with family need to be addressed to both feel and be ready for a monumental life change. 

Here are some of the ways our sellers have avoided identity crises in retirement:

• Keep working on a part-time basis
• Continue to maintain friendships with work colleagues
• Think about what life during retirement looks like
• Remain involved at the board level
• Participate in a roll-up strategy, the process of acquiring multiple smaller companies in the same industry to create a larger, more competitive entity with increased market share, operational synergies, and potential for cost savings.

4. Buy happiness.

According to The American Institute of Stress, 58% of retirees say “financial security” is the most important ingredient to a happy retirement. Sellers seek financial peace of mind to ensure they and their families are set for the long term.

Have a listen to our previous episodes for a deeper dive into how you can buy happiness with financial security:

• Create a comprehensive financial plan – Start early! Episode 2, Financial Planning: The Key to a Seller’s Sanity + Success, and Episode 7, Smart Exit: The Power of Wealth Management, are great resources that cover the how’s and why’s. 
• Know the value of your business – Our very first episode, Don’t Sell Yourself (Or Your Business) Short! reviews the benefits of a professional business valuation. 
• Recruit a team of advisors – There are more than you think! Have a listen to Episode 3, A Seller’s Experience: The Right M&A Advisor Makes All the Difference for tips on how to create a stacked deal team. 

5. Don’t go it alone.

The most effective strategy for selling successfully and retiring confidently is finding the right support and connecting with the right experts. They can help you understand your options and timelines and develop a clear plan.

Build your deal team:

• M&A advisor
• Wealth management advisor
• Accountant for tax planning
• M&A lawyer – There is a need to specialize! Find out why with Episode 5, The M&A Lawyer Leverage. 
• Life coach – This professional can provide personalized guidance and support to help you navigate the emotional and lifestyle transitions of retirement, ensuring a purposeful and fulfilling post-career life. 

Conclusion

Retirement will become a reality at one point or another. It is within your full control to make it what you want it to be. Plan early, build your deal team, ask yourself the right questions and you’ll be in a position to enjoy what comes next. 

If you’d like to get in touch with Jim or Ryan, you can find them on LinkedIn or contact them via email at jim.friesen@portagemaadvisory.com and ryan.buist@portagemaadvisory.com. 

To learn more listen to the full episode, Retirement: Ready or Not? here.