Small Business Owner Retiring | Succession Planning Steps

Small Business Owner Retiring | Succession Planning Steps


If you are a business owner and you’re thinking
of retiring, you need to understand that the foundation of an accurate retirement plan
starts by seeking the answer to 4 simple questions. If you want to sell your business and have
a comfortable retirement you need to seek the answer to 4 questions:
1. How much is my business worth today? 2. If I sold my business today for the amount
noted in question #1, how much will I actually pocket? 3. If I sold my business today, how long would
I reasonably be expected to stay on with the business, after its sold? and
4. How might the answers to questions 1, 2 and 3 change if I kept my business for a year
or two, and used that time to properly prepare it for a sale? Let’s discuss each of those questions in
more detail: How much is my business worth today? Understanding the true market value of your
business requires you to hire someone who has hands on experience buying and selling small
to medium-sized businesses. Someone who can complete a thorough review
and valuation of your business. While this individual might be a business
broker or business advisor it is important that this individual also comment on:
What elements of your business are contributing to its value, and
What elements of your business are not contributing to the value. More on why that’s important, in a moment. If I sold my business today for the amount
noted in question #1, how much money would I actually pocket? In order to determine this, you need to be
sure your accountant is proficient in understanding and implementing tax mitigating strategies
as it relates to selling a business. Don’t settle for any quick answers here,
you need to ensure you qualify for such things your Lifetime Capital Gains Exemption. If I sold my business today, how long would
I reasonably be expected to stay on with the business, after its sale? Few business owners realize that they will
likely be required to stay on and help the new owner of their business, after the business
has sold. Generally speaking, if you have not put the
time and effort into preparing yourself or your business for the sale, you’ll be staying
on after the sale, for a lot longer than you think. For medium sized, complex business this might
be 3 to 5 years. For small business this might be 6 months
to 2 years. Again, the business broker completing the
thorough review and valuation of your business, will be able to provide you with a more accurate
estimate based on the current condition of your business and market conditions. How might the answers to questions 1, 2 and
3 change if I kept my business for a year or two, taking that time to properly prepare
it for a sale? From business owners to so called advisors
alike, many fail to ask this simple question. Again a thorough review and valuation of a
business will show the advantages of keeping that business for a year or two – taking the
time to properly polish and prepare that business for a sale. Let’s summarize the discussion. As a business owner, before you can plan your
retirement, you need to seek the answer to 4 questions: How much is my business worth today? If I sold my business today, for the amount
noted in question 1, how much money would I actually pocket? If I sold my business today, how long would
I reasonably be expected to stay on with the business, after its sale? How might the answers to questions 1, 2 and
3 change if I kept my business for a year or two, taking that time to properly prepare
it for a sale? Knowing the answer to each of these questions
will determine what path you have to take, and how long it will take for you to fully
immerse yourself in your retirement plans. Critical information that is the foundation
of enjoying a wonderful retirement. If you enjoyed this Vlog please click the
like button and subscribe to my YouTube channel here. If you’re thinking of selling a business,
you need to visit my website and learn about my selling a business course.Thank you for
watching!

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One Reply to “Small Business Owner Retiring | Succession Planning Steps”

  1. Looking to sell your business for the highest possible price, for the best possible Terms and in a way that puts more money in YOUR pocket? Enrol in Canada's only course specific to selling a business: http://8-elements.thinkific.com/courses/the-8-elements-approach-to-selling-a-business
    Alternatively for “Commission Free” personalized one-on-one consulting, click here: https://8-elements.com/consulting/

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