Selling a business is a big decision. As part of an overall transition strategy, and to ensure a business sale yields fruitful results, our Omaha business brokers recommend to assess long-term financial security long before selling a business. The largest asset a business owner has is likely the business, and many business owners haven’t adequately saved for the future outside the business. This is when a business become a lifestyle instead of an investment.
As Omaha business brokers, we find that when business owners have not taken measures to save for their retirement, personal travel and other lifestyle choices, they need to extract money from the sale of the business to achieve their goals. So, in preparation for a future business sale, our Omaha business brokers at Results Business Advisors suggest a few pre-planning measures.
First, assess your current financial situation. You may find out how little you’ve saved outside the business. If you plan to sell your business in the next few years, this can hurt growth and sustainability. Then, determine your wealth gap. For owners who are almost solely dependent on the business, they will need to draw much more out of the sale of the businesses than those who have diversified their holdings. In this case, the business must sell for a high price to fund your life after-sale.
Lastly, diversify assets to minimize risk and generate a good return on investment. Diversifying your investments and supplementing your income sources with non-business assets will help protect against the risks of going out of business. Saving money outside the business also provides more choices after you sell the business.
At Results Business Advisors, our Omaha business brokers recommend you begin planning your transition financially 3 to 5 years in advance. However, we’d love to connect with you on how to begin planning for this major life transition. Contact us to find out how we can help!