If you are relying on the value of your business to fund all or a portion of your retirement income, the issues you face can be very complex.

• Unlike other potential sources of retirement income, your business is more than just an investment. It’s actually part of your identity, built at considerable personal sacrifice. In order to unlock the value in your business you will need to be psychologically prepared for the transition from active owner to retiree. It is not always an easy step to take.
• Valuing and selling a private business and dealing with related tax concerns can be complicated.
• Owners with much of their net worth tied up in their business are less diversified than individuals who have a more traditional retirement portfolio, and thus face higher investment risk.

By addressing these retirement issues with Barrons well in advance of your expected departure from the business will ensure you have the retirement income and security you need in your post-business years.

Questions:

• Have you determined what your income needs will be in retirement?
• To what degree will your business meet this need for capital?
• By providing continuing income
• From redemption of frozen shares or dividends
• From the proceeds of sale
• If there is a shortfall do you have a supplemental retirement program?
• Does your retirement exit plan from the business include
• A proposed method of structuring the planned succession including tax consequences?
• Formal timing for transfer of ownership?
• Defined transitional roles for each family member and non-family management people?
• A shareholder’s agreement, will revisions, corporate restructuring, share transfers, and an insurance program?
• A contingency plan for unexpected events – death or disability of the owner, a partner, or a successor?
• For family members not involved in the business, how will you deal with their expectations of equitable treatment?
• Is there a buy-sell agreement in place and appropriate funding to allow active family members or partners to buy out non-active family members or partners?
• Is there a need to financially assist those who will assume ownership in carrying out this purchase?