For many business owners, the toughest issue to resolve in a business is how to keep it profitable. However, the biggest question is commonly an unresolved one: how to pass the business on when the owner retires or is unable to run it. Because of the difficulty in answering the question, many business owners may avoid it. And let’s face it, many are simply too busy.
Nevertheless, there are certain steps that business owners can take to position themselves for smooth transitions into retirement, and to protect the business should something happen to them. We will highlight them through this post.
Think about what a happy retirement looks like – This may be difficult given how busy a person is, or how they may be obsessed with work, but devoting some time to consider what creates happiness outside of work is an important step in figuring out how to transition into retirement. After all, the old adage about death still applies. You can’t take it with you, so it is important to enjoy life outside of work because it can all go away in an instant.
Start conversations with business brokers – For many business owners, passing down a business is a life goal. But when offspring do not show promise or interest, it may be time to consider cashing out and selling to someone else. With this in mind, it is also helpful to know whether the proceeds from selling the business will fund your retirement. If not, what can be done to walk away without sacrificing too much monetarily.
Revisit your succession plan – Procrastination is arguably one of the biggest issues business owners face when it comes to planning for the future. While some have not started such a plan, others have not revisited their plan in quite some time. It is critical to pick up the pieces before a life-changing event occurs.
Now that tax season is over, perhaps this may be a time to visit with an experienced estate planning attorney to discuss your dreams, concerns and obstacles in order to help you get started.
The preceding is not legal advice and is presented for informational purposes only.