The wealth of many boomers is tied up in businesses they own. And that can be a problem when it comes time to retire.
If you’re a small business owner, then you probably speak of your business and your life in the same breath. There’s nothing wrong with that. In fact, you are in good company.
All told, your business is one of the biggest challenges and accomplishments in your life. That said, it’s rare that the business is the only fulfilling thing in your life – there’s family, for one. In addition, do you really want to continue working in and on your business until the day you die, with no retirement or with old-age eventually getting in the way?
With your life and your business so intertwined, it makes it all the more necessary to plan properly.
A recent article in the Wall Street Journal took up this matter in a recent article titled Preparing to Leave. I recommend this article to your reading list because it both warns of mistakes and offers solutions.
To whet your thirst, here are the “mistakes” identified:
- Creating a business that’s too dependent on the owner.
- Ignoring the tax benefits of planning ahead.
- Incorrectly valuing the business.
- Rushing to accept a rich number.
- Hiring your brother in law to do the deal.
- Underestimating the emotional impact of selling a business.
Like one of the old movie matinees, I am going to leave your pondering the solutions to these “cliffhangers.”
In the end, only you know when to hold’em and ergo when to fold’em when it comes to the continuation of your business. However, don’t delay. You, your loved ones and others dependent on the business will be glad you didn’t.
You can learn more about succession planning in the business succession planning on our website. Be sure to sign up for our complimentary e-newsletter to stay abreast of issues like these that could affect you, your loved ones and your estate planning.
Reference: The Wall Street Journal (April 29, 2012) “Preparing to Leave”