What To Do When You Retire as a Business Owner

Posted on Tue, Dec 08, 2020

What To Do When You Retire as a Business Owner

Pouring your heart and soul into building your business has consumed almost all your time and energy. Now that your business is well-established and running like a well-oiled machine, you may be thinking about retirement. What to do when you retire as a business owner may depend on how well you have planned your exit.

Create Your Own Retirement Plan

Qualified financial advisors can help business owners set up retirement plans that offer tax advantages and provide retirement savings. There are many strategies that allow business owners to salt away significant amounts of money in tax-deferred retirement accounts. One such strategy is to create a Defined Benefit Plan, a plan that can allow much larger annual contributions than the typical 401(k) plan. Consult your financial advisor and tax attorney for advice on contribution limits and tax treatment.

But ultimately, in addition to what you have saved along the way, the largest piece of your retirement plan is likely the monetary value of your business. Which leads us to . . .

Prepare (in advance) to Sell Your Business

To prepare yourself for a successful retirement, your need to have a plan - a “succession” plan. This may take the form of identifying a management team that can keep things running when you leave. But, more often it means selling your business to an outside buyer. When you sell, you secure your retirement by collecting a bundle of cash at closing. If, on the other hand, you turn over your business to management after you retire, you keep the risk that the business might fail. If it does fail, you either have to jump back in or risk seeing your retirement plan go up in smoke.

In order to prepare for the eventual sale of your business, and to make your business attractive to prospective buyers, you can start working on the following items now:

  • Develop a strong 2nd tier of management that can fulfill the functions that you take care of
  • Make sure your books and records are clean and in good shape
  • Start addressing any business weaknesses that need to be fixed, like risky customer concentration or inadequate control systems
  • Do whatever you can to keep the company on a strong growth path

You should engage the services of a reputable business broker before you are ready to start the sales process, so he can help guide you as to how best to position your business for a successful sales outcome.

Figure Out How You’ll Spend Your Time

Many business owners obliterate work-life balance, spending every waking minute managing or thinking about improving their business. A sudden shift from a 60-80 hour a week schedule to totally free, unscheduled time is more than many business owners can handle.

What are you going to do with your time after you retire? Golf? Travel? Mentor young business people? More time with the kids and grandkids? Make a mock schedule of how you’d spend your time if you no longer must think about your business every waking minute of the day. Work with your financial advisor to determine how much income you’ll need in retirement to maintain the lifestyle you’d like to have.

If the thought of not working at all is too much for you, find another career, start a new business, or identify causes you care about and volunteer your time and expertise. Remember, continuing to work and receiving a paycheck has implications for your Social Security payout if you haven’t yet reached full retirement age.

Think about what to do when you retire as a business owner long before the time comes, and you’ll be prepared retire securely and pass your business on to a new ownership team that will continue your legacy as a business owner.

Tags: business brokers, sell your business

Selling a Construction Business

Posted on Mon, Dec 07, 2020

construction handshalke

Construction trades businesses often have specialized features that require extra care when preparing for a sale. Here are some things to consider when selling a construction business.

Management Team

Construction trades business owners are often heavily involved in the day-to-day operational aspects of running their businesses. While it’s great to keep your hand on the wheel and be involved in every project, too much direct owner involvement could create problems when you want to sell. If you are the person in your company that has the relationships with key customers, potential buyers might be afraid that your customers could use the change of ownership as a reason to try out competing firms. This might cause the buyer to shy away from making an offer or reduce the value he places on your business.

To solve this problem, when you are beginning to think about selling, it’s a good idea to beef up your management team and start transitioning key customer relationships to your employees. This way, when the change in ownership occurs, it will be seamless from the point of view of the customer. The same employee who dealt with the customer on Friday before the transition will deal with the customer on Monday with the new ownership in place.

Backlog of Work

If your construction trades business is service-work oriented, then having a pipeline of signed work isn’t usually an issue. Your jobs come in on a day-to-day, as-needed basis. But, on the other hand, if your company is largely project based, a strong backlog of signed work is critical to having a successful sale.

You might have a history of doing $20 million dollars a year in revenues. Which is great. But when a new owner comes in, he wants to know that the historical revenue trend will continue – at least for the near future. You need to have a strong backlog that shows the buyer (and his lender!) that there are profitable jobs on the books that will continue to bring in revenues and pay the bills.

Not only will you need a strong Work-In-Progress (”WIP”) report, you should also create a report that tracks projects that you have bid on (broken out by how likely you are to be awarded the project) and projects that you are tracking to bid. This way the buyer can gain some visibility into what your business will look like a few years down the road and gain confidence that he can continue the company’s success into the future.

Clean Up

It’s easy to get caught up in the operational day-to-day issues of running a business and to neglect the less than glamorous work of making sure that all of your documentation is in good order. Owners accustomed to rolling up their sleeves getting work out the door sometimes don’t focus enough on keeping financial and other records in perfect order. Buyers (and lenders) however, will want to see employee and operational manuals, financial records, regulatory compliance records, licenses, etc. all up-to-date and accurate.

Selling a construction trades company isn’t a task that every business broker can accomplish. There are industry-issues that only a broker experienced in selling construction trades businesses will understand.

Work with an experienced construction broker to assure a successful sale of your business.

Tags: sell your business, sell my construction business, construction business broker

Business Broker Report 16: 3 Tips to Avoid Getting "Burned" by Your Broker.

Posted on Mon, Mar 23, 2015

describe the imageSo, you’ve finally decided to sell your business. Congratulations - it’s a tough decision to make.

But the decision-making isn’t over yet. Now, it’s time to choose your Broker - the firm you need to handle your sale and get you the best possible deal for your business.

But how do you make sure you’re not getting burned by your Broker?

Follow These 3 Tips to Make Sure You Don’t Get Ripped Off:

  1. Don’t Pay Any Up-Front Fees.
    You’ve probably attended seminars where they promise to sell your business for three, four, five or even ten times its true value.
      Back away – don’t get sucked in. This is actually a very sophisticated scam.

    Companies like this put on slick presentations, but are really only interested in collecting big up-front fees, not in actually selling businesses. They claim they can create a “frenzy of buyer interest” that will “skyrocket the price to stratospheric levels.” Don’t be fooled. It’s all smoke and mirrors. They want to get you excited and then stick you with a $30-60K up-front fee.
    Money you don‘t get back when they fail to sell your business!

  2. Use a Brokerage Firm that Doesn't Get Paid Until You Do. 
    Not all business brokerage firms ask for up-front fees.
      Some operate strictly on a success fee basis. These firms get paid only when the sale of your business actually goes to closing. These success-fee based Brokers have the confidence that they can get the deal done. After all, if your sale doesn’t close, they don’t get paid.
  3. No Track Record? No Way! 
    You don’t want your Business Broker or M&A Advisor to learn on the job with your sale. Do your due diligence! Check their track record, case studies and success stories, making sure they’re credible. Probe into past and present clients. Are the clients satisfied? Do they even exist?

Don’t learn the hard way -- if it looks too good to be true, it probably is. Stick with a reputable Broker with a solid track record who is willing to earn his success fee only when the sale of your business is completed!

If you’re ready to sell your business - with no up-front fees and no smoke and mirrors - please click here or on the link below or call us at 888 468-1660. We’ll be happy to schedule a free initial consultation and complimentary business appraisal.

There is never an up-front cost or obligation, and all communications will be held in the strictest confidence. 

Sell Your Business The Right Way

Prime Investments Business Brokers takes the risk out of selling. For over 25 years Prime has helped owners in Virginia, Maryland, Florida, Georgia, Pennsylvania, Delaware, Washington, D.C. and New Jersey get the best deal when they sell their businesses – without charging any upfront fees.

Tags: M&A Advisor, sell your business, selling your business, business broker

Business Broker Report 15: Are Market Conditions Right to Sell My Business?

Posted on Mon, Sep 08, 2014

tired business womanYou want to sell your business, but you don't have to sell it today. After all, you've worked hard for many years to build the value of your business. Sure you want to spend more time with family and friends, travel, play golf or do whatever it is you like to do when you're not working. But not at the cost of leaving money on the table. What's the point of working hard for all these years if you can't sell your business for top dollar? You can always stay on a few more years if you have to. As they say, timing is everything.

Is now the right time to sell your business?

We can't answer that question for you from the personal point of view - you and your family have to make that decision. But we can provide some insight into the market for selling businesses. From what we see, current market conditions are extremely favorable to business sellers.

Here are three factors that lead us to conclude that current market conditions have created the perfect time to sell your business:


Pent-up Demand
Many business owners who would have liked to have sold over the last few years held off because of the recession. Buyers have had thin pickings. This created a huge backlog of buyers - individuals, equity funds and companies - searching for businesses to buy.

Buyers are competing amongst themselves for the few good businesses available for sale, keeping valuations high. That makes for a real seller's market.


Availability of Capital for Acquisition Loans
Buyers - equity funds, companies and individual investors - are flush with cash. And lenders, who need to make loans to stay in business, are actively competing to find good deals to fund.

Additionally the Small Business Administration (SBA) recently increased its ceiling for business purchase loans and streamlined its approval process, making it easier than ever for buyers to be approved.  

Buyers have access to the necessary funds. They're just waiting for the right investment opportunity.


Low Interest Rates
Interest rates are still quite low. Low interest rates make it easier for a buyer to afford a strong sales price by lowering monthly debt-service payments. With low interest rates, a buyer can pay a strong price for your business and still stay within the lender's approvable debt-service to revenue ratios. It's a win-win situation. You achieve a high price for your business and the buyer keeps his monthly payments affordable.

But this window of opportunity created by low interest rates won't last forever. As you've probably heard, interest rates are expected to climb as the economic recovery matures. It takes up to a year to sell a business. If you're thinking about selling, you should start the process now.


Low interest rates, pent-up buyer demand, and the increased amount of available capital have combined to create an ideal situation for business owners thinking about selling. Is this a good time to sell your business? No . . . it's the perfect time!


If you would like to see if the time is right to sell your business, please click here or on the link below or call us at 888 468-1660. We'll be happy to schedule a free intitial consultation and complimentary business appraisal.

There's never an up-front cost or obligation, and all communications will be held in the strictest confidence.

Is This the Right Time to Sell My Business?


Prime Investments Business Brokers takes the risk out of selling. For over 25 years, Prime has helped business owners in Florida, Georgia, Virginia, Maryland, Pennsylvania, Delaware, New Jersey and Washington, DC sell their businesses - without charging up-front fees.





Tags: business brokers, busines broker, sell your business