Ownership Exit
Strategies
There are some 12 million baby boomers who own a business, and 70 percent of them will be retiring over the next couple decades. Estimates of the total wealth locked up in these companies run in the trillions of dollars according to the Pew Research Center (pewresearch.com).
W
hat will I do with my business? That answer will have a great and permanent impact in regard to quality of retirement, family values, various tax implications and employee morale! The highest priority in answering this question is planning. The plan for a business transfer needs to be well thought out. There is not a simple nor a single answer. A report last year by the U.S. Small Business Administration found that small business owners over age 50 were significantly less likely than their employees to have pension or retirement plans, including 401(k)s on their current jobs…
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Tow Professional | Volume 9 • Issue 3
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www.towprofessional.com
“An owner might be maxing out a 401k and IRA, but the rest of his cash goes into supporting his lifestyle and the company … So, the problem gets bigger—they just haven’t effectively diversified their wealth,” Many of our clients are facing this dilemma right now. Their businesses are performing better in 2019 than they have in years (in some cases as far back as 2007), and the notion of selling now is being paired off against the idea that the business may be worth even more in five years. Why doesn’t that make sense? First, you have most (if not all) of your life savings tied up in a highly illiquid asset. That places you at tremendous risk from both an
