You have decided to retire from the business you helped nurture and lead for a number of years. It has been difficult to make this decision, and now that you have, you must begin planning your exit.

To make the transition a successful one, it's helpful to engage others around you and define what would be the best possible course of action. Do you want to sell the business for the highest dollar it can get, or is a quick sale more important? Are you more interested in ensuring high net proceeds for yourself, or do you want to leave the business in the hands of a family member? What about exploring a strategic fit with a new owner?

When making this decision about the future of your business, consider your personal goals, the current and future valuation of the business, and the current and future market for your business. Let's look at each area in greater depth to determine how you can best create a rewarding succession plan.

Getting Your Personal Goals in Order

Identifying and creating personal goals is part of any exit plan, and these goals will be affected by your specific plan. For example, do you want to stay involved with the business in some way? Do you want to reward loyal employees or a family member, or is funding your retirement your priority? 

When working to answer these questions, talk with management, family and staff, conduct personal soul searching and then hire professionals to assist you in formulating a plan so you can reach your objectives. It's also a good idea to think about the values and beliefs you have brought to your business and consider how they will be continued by the next owner.

Understanding What Business Valuation Means

The value of your business impacts financial planning, liability for gift and estate taxes and company stock agreements as well as life insurance and corporate finance implications.Since you are not likely to retire tomorrow, you will want to increase the value of your business either for sale or for transfer to valued employees or family members. The best route to retiring in comfort and confidence is having your business functioning at its highest level when this transition occurs.

The Market Overview

As the cliché goes, timing is everything—especially when it comes to the market. Once you have established your personal goals and you've conducted or obtained a valuation study, the next step is to investigate whether an actual market exists for your business. Are there potential buyers, and will they meet your valuation goal?

Even if you have decided to transfer the business to a family member, a sense of where the market is headed will help the new leader and staff understand the challenges ahead.

Aligning your goals prior to engaging in a full succession plan will improve the odds of making a smooth transition that allows your business to flourish for decades.