Beyond Your Business Transition

By Tom Bixby, President & CEO, LEVEL Management Partners
Published April 14, 2016

The first article in this Business Transition Series addressed the complex maze of options involved in a business transition. In this article, we’ll look at the first key source of transition complexity as we focus on planning for your life after leaving your business.

Polishing your Crystal Ball

Surprisingly, business owners too often assume that vague plans to fish, golf, travel, etc. will satisfy what they will do when faced with a pile of cash, a wealth of free time and no more boss duties. It is essential that you plan ahead to thoughtfully and deliberately envision your desired future. Involve your family members and friends who have already experienced retirement. You may be surprised at what all that free time does to spending habits!

An expert Wealth Manager can help you polish your crystal ball – to help you consider your current and future lifestyle requirements as well as provisions for your family’s health and other circumstances. Maybe you’ve thought of giving back to your community through charitable causes. You might have kids or grandchildren ready for college or future weddings to fund. You and your spouse could consider Long Term Care insurance to preempt any medical issue or disability that could cause a financial hardship.

Your Wealth Manager will then help to determine the financial resources needed to fund post-exit living. Don’t be surprised if the cost of retirement living exceeds your expectations.

“Few people concentrate on the dramatic impact exiting their business will have on their lives and lifestyle,” says LEVEL Expert Network™ Member Bob Tankesley, Partner at Unify Wealth, an Atlanta area Wealth Management firm.

Success Story - Planning Right

Marshall got the entrepreneurial itch when he was 47 years old and purchased a small Chicago-based distribution business in 1995. In 2006, he turned 55 years old and began planning for his business transition. He had been working with his Wealth Manager to develop a retirement plan. Marshall married later in life and he had built a nest egg to cover sending their 3 children to college and graduate school. His wife, Jeanne, also worked at a law firm and helped pay the bills during a couple years when Marshall’s business fell on hard times.

Marshall and Jeanne’s plans included world travel once their youngest child graduated college in 2014. Marshall’s Wealth Manager put a plan in place a detailed plan to allow plenty of travel and other recreational spending along with generous provisions for family and community giving. This plan advised that Marshall would need $3.5mm from a 2014 sale of the business in order to fund the retirement plan.

Fortunately, Marshall had begun his exit planning early. He met with the business broker who sold him the business back in 1995 and received an updated valuation of $2.1mm. During the next few years, Marshall was able to grow his business to the point where he was able to sell the company in 2014 for $4.7mm. Marshall credits his Wealth Manager with helping him set a solid growth target for his business so he could confidently sell his company and live his post-exit dreams.

The next article in the series, “Business Transition – Through the Buyer’s Eyes”, will will address evaluating your business from the buyer’s perspective.

View Part 3 - Business Transition - Through the Buyer's Eyes

Fully develop your post-exit opportunities with a holistic exit strategy and plan incorporating LEVEL's Growth Vision and Value Architecture solutions.

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