How to successfully transition into retirement
Making your way into retirement is a bittersweet feeling. On one hand, you get to spend more time with your family and enjoying your hobbies. But on the other, you’re letting go of a business you’ve spent years building.
Planning for retirement by selling an accommodation business requires preparation. From preparing your sale to handing your business over, we’re here to make the transition into retirement easier for you.
Planning for retirement requires a little time
Timing is everything when selling a business. Although there’s no set rule, you may consider the pros and cons of selling at a certain time of year, or season, to maximise your chances of a profitable sale. Although peak season may attract slightly more buyers, off-peak sales tend to draw in those who have industry experience, either owning or managing an accommodation business.
You’ll also need to produce at least two to three years of profit and loss statements to increase your chances of a decent sale. Try to avoid spur-of-the-moment business sales and dedicate some time to market research and tying up loose ends.
Boost retirement funds by building equity
One of the best ways to transition successfully into retirement is to boost your accommodation business’s equity before the sale.
Your first step is to accentuate the business’s positives. Any features that make your accommodation business appear more desirable than your competitors’ offerings, including both competing businesses for sales and accommodation options in your local area should be your first focus.
Whatever category of accommodation business you own, there are some fundamental areas that will help speed up the business sale, such as having a clear idea as to who your ideal buyer is and what they are looking for in an accommodation property.
We’ve covered specific accommodation business’s and what buyers may be looking for in them in the following guides:
- Owning a caravan park – keep expenses low and fun high
- Can a backpackers bring in a bounty
- Why a motel is a great first business
Always set out to minimise the negatives of your property by looking at areas you can fix, maintain or enhance quickly and easily. Whatever your budget, focus on the most inexpensive fixes first. You’ll still enhance your accommodation business’s value in the eyes of buyers, without having to dip too far into your potential retirement funds. Talk to your accommodation broker about specific areas across your property worth focusing on and a maximum budget, one that won’t overcapitalise on the business’s value.
Finally, never underestimate the power of marketing when it comes to boosting your business’s equity. All retirement checklists for business owners should feature a sturdy marketing plan that focuses on both offline and online marketing.
Producing a handover for the next owner
Most retirement checklists for business owners require you to create a handover document. Handovers are especially important in the accommodation industry, as only the previous owner can anticipate the challenges that the next one will face. A typical handover could include:
- Information about key customers, busy times of the year and big events.
- Information about staff, their roles, skills, pay grades and how to support them.
- Details of suppliers and people who carry out repairs.
- Any daily, weekly and monthly processes.
- Regulatory requirements, such as certificates and renewal dates, that show your business meets and abides with industry legislation.
- Security details, including alarm and safe codes, safety manuals and evacuation procedures.
While it may seem as though preparing for retirement requires a lot of effort, the lifestyle benefits that accompany your actions are worth it. In addition to having more leisure time, you’re free to spend more time with your family. You have the freedom to travel and to further your hobbies, and you may find that paying close attention to your health becomes easier.
If you’re ready to start preparing your accommodation business for sale, we’re here to assist, obligation free. Accommodation Business Brokers can provide you with the advice you need to transition from owning a business to retiring on its equity. We serve accommodation businesses throughout Australia, so please do not hesitate to contact us for help.