The business you have created is most likely your most significant financial asset. But if that business is not transferable, that value can’t be realized.
Take a moment now to ask: Are these aspects of your business transferable?
· Client/customer relationships
· Processes and technology
Transitioning a business requires a plan—not only for your business, but for you and your family. The plan must be well thought-out and able to be well executed. Typically, you’ll need to start planning for your exit three to five years in advance, at a minimum, to fully leverage all available options.
Once you transfer or sell your business, you will be met with a distinct set of needs. There’s a liquidity event; you’ll be left with a pool of assets. What are you going to do with those assets? How do you come up with a financial plan to make sure you have that stream of income in perpetuity, the same kind that you had while you were involved in the business?
Alternatively, if you transfer the business, you won’t have a big liquidity event. Instead, you’ll need a financial plan in place to budget your cash flow and invest appropriately, given your new retirement status.
We’ll look at key components including:
· Personal financials – balance sheet
· Personal income and savings summary
· Personal liabilities and expenses summary
· Value gap analysis
· Retirement analysis