I want to leave my business, but know I can’t afford to!
You want to leave your business. You might be a little tired; you might be a little bored. You have this nagging feeling that as much as you would like to do so, you know that you just can’t afford to move on.
Someone might have asked you when you were going to retire. You might even have said in five years. The unfortunate thing is, you could find that in two years retirement still is five years away. There are things you can do to make sure this doesn't become a permanent situation.
Your business isn’t going to get you there by itself
Your business isn’t going to get you to retirement all by itself. You’ve believed that if you just do a few different things it will. For the past several years you’ve thought that getting out of your business is only a few years away. As the years have gone by, you keep pushing out the date. The problem is the date never seems to get any closer.
There are things you might not have considered that could help:
- You can create more cash flow every year that you then save.
- You can find a way to make your business worth more to a buyer.
- You can diversify your investments.
- You can realize that you’ll need at least two more funding sources besides your business to retire.
You don’t need to diversify for safety; you need to diversify to leave.
If you don’t diversify your investments you’re not going to be able to retire. You need to put lots of money into your 401(k) plan. You’re going to need to have other investments that are outside your business.
The sad fact is, your business is never going to provide you the same amount of cash flow after you leave than while you own the business. You need to learn the difference between cash flow and cash created by investments. The difference is huge!
Learning to ask the right question
The right question isn’t asking how much can I sell my business for? A better question is how do I need to organize my finances so I can leave my business and not have to work for someone else? The answer to the second question is very different from the first.
Here are some special reports that might help you know what you need to leave your business.
- The Salability Index - this survey will help you find out how salable your business is and what someone might pay for it
- The Core Value Report - this survey will help you understand what drives value in your business. You’ll learn which parts of your business will bring the best results with the least amount of effort
Start with the Four Boxes of Financial Idependence. It’ll give you an easy way to figure out what you need when it’s time to transition out of your business.