More and more small business owners are selling their companies, with sales hitting a four-year high earlier this year in the United States, and Canada predicting its largest small business turnover ever in the next five years.
“Many of our CEOs are baby boomers approaching retirement age,” says Kathleen Richardson-Mauro, co-author with Jane M. Johnson of a practical new guide, “Cashing Out of Your Business,” http://www.richardsonmauroandjohnson.com/. “We’re about to see a tsunami of ownership transitions, and too many of these small business owners are not taking steps early enough to plan for it,” adds Johnson. The co-authors suggest these steps for small business owners of any age to begin preparing mentally for their non-CEO future:
• Start now. You never know when you might receive an unsolicited purchase offer or what life events might rock your world. With planning, you can ensure you still have a social life, a sense of accomplishment, challenges, and the other intangibles that make you satisfied and gratified.
• Identify what you want to get from your ownership transition. Financial goals may include receiving enough money to live on for the rest of your life and creating a foundation to further a cause important to you. Non-financial goals may include regaining balance in your life and following a passion you gave up when you started your business.
• Identify your fears, concerns, and other barriers that prevent you from planning. Many owners fear what will come next and worry about losing their life’s purpose. Most wonder if they will have enough money to live the lifestyles they desire, and they’re concerned about their employees’ futures, Johnson says. “Take proactive action to address these concerns by having a family meeting; discussing the future with your spouse; and identifying your actual financial needs. That will allow you to find solutions and work through them,” says Richardson-Mauro. HBM
Richardson-Mauro, a Certified Financial Planner, and Johnson, a Certified Public Accountant, specialize in helping business owners successfully transition out of companies and achieve their goals. They recently launched an educational website, Business Transition Academy, to help owners plan their exits on their own. Visit http://www.businesstransitionacademy.com. add: 4/2014 hp: 6/25/14