You fought and clawed your way into business ownership. Then, several times, you did it again just to survive. The years rushed by. The kids are grown. A few of your retired friends have asked, quite crudely, “You gonna die in the saddle?”
Well? I guess many do. And they leave a big mess for the business and family unless they do considerable advance planning, work and communication.
Others, of course, exit of their own volition rather than wait for divine intervention. They do so to enjoy “retirement.” Or to do something different while their skills are still sharp. Or to cash out when the business is on top.
One thing’s for sure – you’re the boss. You can have it any way you wish.
Die in the saddle or sell and take a traditional retirement. If you think I’m being trite, think again. Some business owners just don’t want to do anything different. They continue to own, and manage, well past retirement age. That’s okay. It’s motivated by joy, fear or both. Joy of working. Fear of retiring. They either love their jobs and they can’t see doing anything else, or they are scared of retirement and the lack of “something to do.” For these people, the amount of sale proceeds is often less important – mainly because they’ll have more years to fund retirement accounts using company funds and fewer “retired” years to finance.
Others will want to do something different. Retire, or have a second career, or not stay “beyond their time.” If this is you, you’ll likely want to maximize the after-tax cash you obtain from your business. The reason is simple – you want to have the funds necessary to fully live out the next chapter of your life. In short, you will sell your company – and try to maximize proceeds. Many people just don’t want to quit.
Whichever option you choose – retire or ride it out – a lot of planning will be required. With the former, a business sale is complex, time-consuming and risky. Business owners can waste a heck of a lot of time and money trying to get a deal done. With the latter, mechanisms must be put in place to ensure that the business and family are not placed in turmoil when something happens to you.
Whichever you choose – this issue of The Business Owner Journal has information that will help you make it work.
This article originally appeared in The Business Owner Journal, the periodical of choice for owners of small and midsize private businesses. All rights reserved, D.L. Perkins LLC. © 2012.
This publication is intended to provide general information on the subject matters covered. It is sold and distributed with the understanding that neither the publisher nor any distributor or advertiser is engaged in providing legal, tax, insurance, investment or other professional advice. The advice of a qualified professional should be sought before any reader applies a concept presented herein to his or her particular situation or business.
D.L. Perkins, LLC is solely responsible for this content.
