Why your small business shouldn’t be your only retirement funding option - The Globe and Mail

Most small business owners put all they have into starting and growing their small businesses. As such, they often plan to sell those businesses as a means to fund their retirement. Nothing wrong with that, as long as it’s not their only plan for financing retirement.

First of all, you need to build a business that you can sell into retirement which requires years of management and foresight. And in the case of many small business owners, that’s not a key priority. Most small businesses are so dependent on their founders to run the day-to-day operations and to put the fires out, that selling to a third party becomes challenging.

Furthermore, most small business owners operate their businesses to reduce their tax obligations, as opposed to demonstrate their ultimate profitability and cash flow potential. Creating a ‘well-oiled machine’ that can run without you and generate net income strong enough to interest a wide variety of acquisition candidates takes years of work and planning. Failing to do so means that when you’re finally ready to retire and ‘cash in,’ finding a buyer -- as well as getting a high price for your business -- may be extremely difficult.

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Why your small business shouldn’t be your only retirement funding option - The Globe and Mail:

For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.