Your business is an asset – but it shouldn’t be your only one.
I met with a business owner recently who is wanting to retire this year.
He’s poured his heart and soul into building a very successful business, and it shows.
He should be able to command a premium price when he comes to sell.
Unfortunately, he’s in an industry that is facing significant change and headwinds at the moment and as a result valuations have dropped alarmingly.
Where previously he was anticipating retiring with $4.0 Million he’s now looking at $2.5 Million.
He’s devastated.
Over the years we’ve had many discussions about the need to invest more broadly to reduce the risk of having most of his wealth tied up in the one asset.
But he always had a reason not to.
Now clearly he and his family are not destitute – they will survive and will still enjoy a comfortable retirement.
However, the plans he had to help his children with their purchase of a first home, and the philanthropic donations he wanted to make may need to be reconsidered and potentially tempered.
We know it is difficult to balance the capital needs of your business with your personal needs – both immediate and longer term.
It’s also hard to carve out the time to look at these issues, and difficult to calculate how much money you actually need to be able to do all of the things that are important to you.
It’s not impossible to do, but sometimes being asked some pointed questions and having to really think about it and decide can help. Having someone else crunch the numbers can make it easier too.
If you’d like to sit down and talk about your plans you can book a meeting with us by clicking here.
