Show me a profitable exitBlog added by Brian Boggs on May 2, 2011
Ranked: #759 (145 pts)
Who would have thought that the world would slide into the worst financial meltdown since the 1930’s?
The volume of margins calls on loans is unprecedented and sadly the frequency of bankruptcies and home foreclosures —though not widely reported — is the highest we’ve seen, certainly in my lifetime.
Retirees and many self-funded retirees are talking openly about returning to the workforce because of the massive reductions in their nest eggs. This is something few would have contemplated just a short time ago as they made the mental and physical move to retirement and the easy life.
Additionally, the prospect of returning to the workforce is compounded by a bleak future for re-employment, as employers are more likely to put staff off rather than crank up hiring.
Just imagine this problem compounding if you were forced to sell out of your business because of bad health or the death of a business partner.
You see, more than 80 percent of small to medium size business owners plan to exit their business enterprise in the next 10 – 12 years and a staggeringly high percentage state their business interest is their retirement plan. In other words they are relying on the proceed s of the sale to fund their comfortable retirement … not struggle street retirement! Yet most of these very same business owners have no exit strategy in place at all and are paying taxes at the maximum rate unnecessarily.
There are a number of excellent plans and strategies that can be implemented by developing a sound business financial plan with a documented exit strategy.
But there is no dress rehearsal to get this right…you only have one chance!
There are many important considerations to dwell on including:
Should I merge or consolidate my business to create an even bigger business?
- Will my business sell for enough to enable me to retire to the lifestyle I want?
- If I decide to sell down to a partner, key employee or a member of the family, how do they get the money to pay me out?
- How can I guarantee they will be able to complete if staggered payments are to be made?
- What method should I use to decide if they are the right person to assume leadership?
- Do I stay? Do I sell? Is it a bit of both or do I liquidate?
- What’s plan B if either I or one of my partners should suddenly die, be made bankrupt because of treacherous investment markets or a sudden tragedy strike?
- How do I best preserve the wealth I have built up over several years for myself, my family and their children?
Should I consider buying a commercial premise in the business name or is there a better strategy?
I’ve heard a lot about self-managed superannuation but I don’t think I know enough to ensure compliance.
So you can see there are many considerations and it’s simply not possible to wake up one morning and say I don’t want to do this anymore. In my case it took me seven years to prepare and transfer ownership in a smooth transition that ticked all the boxes — addressing all parties concerned including existing staff, my customers, my family, me and the buyers of the
What my journey led me to understand was that I was looking for advice. And it was through this process that I recognized the lack of appropriate advice and good helpful advice at that — in a market where so many of the players often confused my needs with their need to sell me product.
This is virtually an untapped market for advisers who can identify the right processes and procedures — who can make the process understandable for the wary business owner and can smooth out the many speed bumps and transition the business owner into an enjoyable and secure retirement. But because of the regulated compliance regime in place, it is critical that interested advisers understand how this market can best be served.
Though not available when I was working through my exit strategy, my interest in this subject has not dwindled. In fact, if anything, my experiences greatly highlighted the need to pursue answers. Just recently I discovered a program for advisers to access the solution. After completing the program, successful advisers can call themselves specialists in the field of business financial advice.
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