02 March 2017
At Haines Watts I talk to a lot of business owners about their options when it comes to exiting their businesses. The traditional thinking has always been to reach a point where they no longer want to drive their business day-to-day and then to sell it to a third party, or possibly even entertain an MBO. They can then take the cash and sail off into the sunset...
However, more and more I find I'm helping to teach them to think about their business and their exit from it in a different way. Essentially this takes a simple change of mindset. Whatever their business or source of wealth is it is merely a tool to facilitate their lifestyle, it is an investment (albeit an investment of their blood, sweat, and tears). I get them to ask themselves this question:
"If I sold my business, would the money I got provide me with the same level of income as my business does?"
More often than not the answer is no, it won't. So, if we take a step back, and look at it in the same way that they would approach their normal business dealings what should they do? With some, the answer is staring them in the face, and they have taken most of the steps they need to already. For others, it's a case of helping them get the building blocks right to allow them to step away from their business. Of course, I am talking about keeping their business and making the transition from director-shareholder (and in some cases general dogsbody) to that of a retired director-shareholder. To put it simply, just because you no longer work in your business 5/6/7 days a week does not stop you from enjoying the profits it generates!
So, how do you do it? Well, I'll save that for another time...
