Retirement planning challenges
While many business owners expect the business to provide some, or all, of their retirement income via a sale of the business, there are a multitude of factors that influence whether or not the business will sell for what you feel is its full fair market value.
As you plan for your retirement, consider the following:
- Will there be a willing buyer when you are ready to retire?
- Will the sales proceeds provide you with adequate income for your lifetime?
- If the new owners are not as successful in running the business as you were, how will that impact your retirement income, especially if you sold the business on an installment basis?
Timing is important when it comes to selling a business, and it is often difficult to predict what type of market you will face when (or if) you decide to sell your business. Ideally, you will be able to time your sale with a booming economy so that you receive top dollar. Unfortunately, there is no way to predict what the market for your business will look like when you retire or whether you will receive enough to secure your retirement future.
With all of this uncertainty, it is important that you put a plan in place today that lets you decide how long you want to stay active in the business, while at the same time protecting you, your business and your family from life’s many unknowns.
We will discuss the key person solution for small business owners in next blogpost.