You may love running your business. But in the back of every owner’s mind is the knowledge that one day you’ll need to sell the company and retire.

But with global markets in upheaval and the future less certain than ever before, how can you guarantee that your business will be worth enough on the open market for you to retire?

In this series, we’ll look at the core ways your business can be structured to deliver on your own personal, family, philanthropic and leisure goals, now and into retirement.

Creating a business that will fund your retirement plans

Your business has to be the nest egg that provides the equity for you to retire. But how do you secure that nest egg, the value of the business and your retirement plans?

We’ve highlighted five strategies that will add to the value of your business – so, when you come to sell, you’ll get the return on investment (ROI) needed to retire comfortably.

Build a business that can run without you

You may be the boss, but your business needs to function independently of you to hold its value at sale. One way to do this is to systematise your operations, so the day-to-day procedures exist outside your own head and are scalable as the company grows.

It’s vital to train up a strong management team that can keep the business trading when you’re no longer in the picture. This autonomy significantly boosts the value of the company, as potential buyers want businesses that won't collapse when the founder leaves.

Focus on recurring revenue streams

Recurring revenues give your business more stability. Think about focusing on subscription services and other predictable income sources to help build up value in the company.

Recurring revenue dramatically increases business valuation multiples (often 2-3 times higher than transaction-based models). By creating a stable, valuable business, you can sell the company for a premium price, providing the equity you’ll need to fund your retirement.

Invest in intellectual property and licensing

Having valuable assets in the business boosts the potential price of the company. Your intellectual property (IP) and brand equity are two intangible assets that can have a significant impact on the value and asking price when the company is put up for sale.

Think about developing products, processes or technologies that can be patented and then licensed to other third parties. This is a great way to use your IP effectively, boost your brand and create passive income – something that will appeal strongly to any potential buyers.

Keep detailed records and keep finances healthy

A viable business with a good financial health score is the holy grail for buyers. So keeping your financial health, company credit score and cashflow position under control is vital.

It’s important to have rigorous financial tracking in place and to keep a close eye on your key financial metrics. Clean books with 3-5 years of strong profitability make your business significantly more attractive to buyers and can justify higher valuations and better ROI.

Create a strategic exit plan well in advance of retirement

The key to a successful exit is having an exit plan in place as early as possible. Work with your advisors to add value to the business, identify ideal buyers and find the most tax-efficient exit structures that will deliver the funds you need on retirement.

Ideally, you should start this exit strategy at least 3-5 years before you intend to retire. This gives you time to think about succession planning, boosting the underlying value of the business and making sure you’ll have sufficient capital for your retirement needs.

Helping you secure your income and lifestyle

You deserve a restful and comfortable retirement after many years of leading and growing your business. But to do this, it’s important to start planning now and getting your exit strategy ready.

Come and have a chat about your retirement plans and exit strategy. We can also introduce you to independent financial advisers who can offer personalised wealth management advice.