Retirement planning should begin on day one of your business. Yet many owners don’t give retirement a single thought until they’re ready to transfer ownership. That can reduce value and make the process of transferring ownership or selling more stressful than it needs to be. These 10 retirement preparation strategies for business owners can prepare you for retirement no matter where you are on your business ownership journey. 

Get Your Books in Order 

Buyers typically want to see at least three years’ worth of books before investing in a company. The more formal your statements are, the more reliable the buyer will perceive them to be. Ensure your books are readily accessible, and base any forecasts on the data in your financial documents. 

Know How Profitable Your Business Is 

Many businesses, particularly smaller ones, claim a wide variety of expenses. You must have documentation to support these expenses. Minimizing these expenses can increase value and give a clearer reflection of profitability. 

Make a Strong First Impression 

Take a hard look at your business. What will a buyer see when they stop by for the first time? Is your staff friendly and professional? Do your managers behave as knowledgeable experts? How does your building look? These measures of curb appeal can affect the buyer’s ultimate value assessment, so ensure your business is ready for its public debut. 

Consult a Trustworthy Advisor 

Don’t make guesses and take shots in the dark. Work with a skilled financial advisor for advice about planning for your business’s future. At minimum, this means working with a tax advisor. In many cases, it’s wise also to consult an M&A advisor, since they are experts in driving value during the M&A process. Information from outside advisors tends to carry more weight than in-house experts, so if you’re seeking help with driving value, you may need an independent expert. 

Get Legal Paperwork Under Control 

The paperwork that tends to make your eyes glaze over may be the same paperwork that affects the value of a deal, or even whether the deal can happen. Review all of your legal documents—permits, licensing agreements, customer contracts, incorporation papers, intellectual property documents, and anything else that may be relevant. Consult with your lawyer about how these documents may affect a sale, and be prepared to provide these documents to prospective buyers. 

Know Why You Are Leaving 

Buyers always want to know why a seller is leaving. If the business is failing or profitability is flagging, that’s a problem. So if you’re leaving for personal reasons or retirement, make this clear. 

Weigh the Benefits of Management Succession

You need to make yourself irrelevant to the business to drive value. This is where your management team comes in. Ensure they’re prepared to fully take the reins. A business with a high quality management team is a much more enticing acquisition. 

Stay Focused on the Exit 

Exiting a business is a complex and demanding undertaking. Don’t take your eye off the ball. Some owners let performance decline during a sale because they’re too focused on the ins and outs of the sale. Hiring an outside advisor can help you remain focused on the sale without taking your eye off the business. 

Get Your Sale Team Ready 

Your advisory team is a major predictor of the success of the sale. So begin interviewing attorneys, accountants, and M&A advisors well ahead of the sale. Working with an intermediary can greatly increase value, so weigh this option and consider the value it adds.