After years spent launching and growing your business, the day will finally arrive when you can sit back and enjoy the fruits of your labor. But, just as starting your business involved hard work and planning, the process of exiting your firm can be a long and challenging process.
If you’re a small business owner, you’ve invested a great deal of time and effort into building your company. With day-to-day demands, it may be difficult to imagine your eventual transition into retirement. Yet, if you want to build personal financial security and ensure business continuation, it is important to plan ahead.
One of the more difficult challenges facing a business owner is the formulation of a viable and economically beneficial exit strategy at retirement. Typically, the main goals of such an exit strategy are: 1) to identify a qualified buyer; and 2) to receive fair compensation for the business, which would, in turn, translate into a desirable retirement income.
History is full with examples of parents taking actions they believe will improve the lives of future generations. In 1780, then President of the United States John Adams wrote to his wife1:
Many of us aren’t addressing the realities of retirement planning. Here are some of the worst mistakes being made today.
If you’re thinking ahead to the day when you’ll no longer run your business, think about these five exit strategies now so you’ll be prepared for your future.
It all depends on you. Thanks to the Baby Boom generation, pre-retirees and retirees have a lot more options than did previous generations of Americans. There is a lot to consider before you decide where to live during retirement: your savings and investments, monthly income, family, friends, legacy, work options, weather, interests, health, and a variety of other factors.
“As you near retirement age or even within a decade or so, it is time to start doing some serious financial planning,” said Larry Stein, CFA, author of Peace of Mind Investing.
“In preparing for battle, I have always found that plans are useless but planning is indispensable.”
Dwight D. Eisenhower
We understand that business owners are so busy addressing today’s economic challenges that they can overlook the critical task of exit planning. We also understand that, at some point: