Entrepreneurship has many upsides.
Business owners get to decide what they stand for and choose which customers they want to work with, owners set their own schedule and have control over their time, and they have the option to generate a nice income from their business.
But what happens when you’re ready to leave your company? How will you replace that income you were receiving from your company?
What is your plan to transition your business – finally sell and cash out?
Here are a few tips on surviving after your business is sold.
Have a cushion of cash in the bank.
Many business owners never sell their businesses. They just close the doors. According to the Exit Planning Institute (EPI), some 4.5 million firms representing more than $10 trillion in business value will transition over the next decade or so, but Christopher Snider, President of the EPI believes only about 20% to 30% of businesses that go to market end up selling.
In addition, according to Transworld – one of the largest business brokers in Colorado – 70% of business owners provide owner-carried financing. That means that the owners typically do not get much cash up front and accept payments over time.
So, be prepared to lower your expectations for a large cash payout or quick sale. It’s prudent to put some money away to get you through the sale and on to the next phase of your life.
Talk with a financial planner.
As a business owner, you’ve got options in how to plan for the future that doesn’t include a steady income from your business. Abe Fitzsimmons and his company, WealthWave, works to increase the financial literacy of his clients and provide solutions to business owners and entrepreneurs.
Having a plan eases the anxiety of moving onto the next phase of life.
For more information about how to create a plan for your future and that of your business, check out the Denver Entrepreneur Education Network event on April 18, 2019. You can talk with Abe about your situation.
Review options for alternative revenue streams inside or outside your business.
Develop revenue streams that are not related to your business. Can you create a consulting practice to help other business owners accomplish what you have done? Perhaps a portfolio of other assets such as real estate or investments can provide another source of income.
These are just a few strategies business owners and entrepreneurs can use to keep income flowing after a transition. What are your plans after you sell your business? Let us know in the comments.
Want to know more about positioning your company for a transition? Rest assured 35 years of experience is behind Management Insights™, Forward Insights™, and Expert Insights™ – the tools you can use to understand how to strengthen your company.
Shina Culberson, President