Perfect Timing

Planning for retirement is a daunting proposition for anyone. Business owners and highly compensated executives face the additional challenges of high income tax rates and limits on the amounts that can be deferred or contributed into qualified retirement plans.  These factors can restrict their ability to accumulate money for retirement on a tax-favored basis. They also might contribute to when the timing is right for retirement.

Retirement will only come once in your life. Retirement may also be the biggest financial event of your life. It should be as carefully planned as your business was.

You’ve worked hard to get your business where it is today. You’ve likely managed it very closely, watching all aspects especially the bottom line. Doesn’t it make sense to apply the same thoughtfulness and diligence to decisions about when to retire or sell your business?

We understand that you have concerns. They may include:

1) “I’m not ready to retire.”

That’s the right of every owner who worked hard to build a business. But if you wait, the market may not be as great tomorrow as it is today. If you wait to commit during a down-cycle moment, you might need to hold on another six to eight years to capture the market at an equally brisk moment. The right time to sell is always when the business is experiencing a bounce.

2) “I was hoping to leave the business to my son.”

Alas, Dad’s dream of passing the company to his children is often not the dream of the next generation. You need to assess the real capability of the successor generation to manage a takeover of your business. That includes an agreement of when the current owner will end command. Covenant Consulting Group has seen many business sales at a child’s suggestion, to the parent’s disappointment. If financial freedom and security can be gained without passing on a lifetime of servitude, it’s at least worth considering.

3) “I don’t have anyone here ready to run this company without me.”

Buyers who have the money to purchase your company know something about business and have the capital to fund new initiatives, even hire new people, as needed. Buyers understand that an owner CEO needs to be replaced. Often sellers are amazed when they learn how quickly their staff develops under new ownership. Employees can flourish when they have the capital and unbridled enthusiasm of new owners behind them.

4) “I might like to pull some chips off the table to improve my family’s financial security, but I really don’t know what I’d do with myself if I didn’t own this company.”

Life can be vastly different after someone sells, but that should include a more relaxing, enjoyable life for the owner. The right way to end a successful business-building career is not to wait for your health to fail.

For more information on whether the time is right for retirement, contact Covenant Consulting Group at: