Many small business owners view their company as their greatest asset. And while this may be true, your business shouldn’t be your only asset. While selling a successful business is a great way to gain a lump sum for retirement, owners could lose out on a reliable next egg if they don’t plan properly.
- Many entrepreneurs only invest back into their companies. It is important to set aside liquid assets from the business and place them in retirement vehicles like an IRA or a 401(K).
- Before trying to sell your business, clean up shop. Begin your pre-sale planning two to three years in advance. Selling a business is a time-consuming process; make sure you allow yourself the time to do it properly.
- Don’t sell to the first interested buyer; better offers may come your way. One way to do this is by creating a private auction allowing multiple bidders to express their interest in the company.
- Don’t expect one large payout. Thirty percent of business sales involve a seller’s note, meaning the seller will receive payments over a set period of time that adds up to the business’s total worth.
Planning ahead and avoiding these four mistakes could put you in a great position for your retirement. Happy planning!
Note: “Fresh Ideas” are published each week by Countybank and its family of financial service companies. With financial centers in Greenville and Greenwood, Countybank has a team of highly engaged professionals ready to bring a full scope of financial solutions designed to help families and business owners reach their goals.