23 Oct


  • Posted by Clear Rock

Baby Boomers: Really Ready to Exit?

Great article the other day in the NY Times about baby boomers exiting their busineses. We’ve heard many times about the “10 trillion dollar opportunity” – all those baby boomers getting ready to retire and in many cases sell off their company.  But are they really ready?

From the article:

While I’ve never seen a statistic comparing the lack of retirement planning with a lack of exit planning for retiring business owners, I’d be willing to bet that there is a strong correlation between the two. In fact, my experience tells me that, while most people check the value of their stock portfolio at least occasionally, most business owners wait until the 11th hour to determine the value of their businesses.

Couldn’t agree more.  As the article notes, 75% of all business owners have NO exit plan.  One of the topics that we repeatedly bring up is that business owners that are considering a retirement-oriented exit (vs.  selling young and continuing to work)- it’s imperative to consult with a sold wealth manager before the exit.  Not during, and certainly not after.

A few points to consider:

  • If you are serious about selling and doing it right, plan on a 2-3 year process
  • Understand your valuation, and how the post-tax net proceeds fit into your retirement plan
  • Your retirement plan does not require your CPA- wrong tool for the task.  It requires a wealth manager / financial advisor

We work closely with financial advisors and wealth managers for exactly this reason.  We want to be sure that our clients have a clear understanding of thier situation and are ready for the process.  Ultimately the market dictates valuation, but it doesn’t do anyone any good if the seller doesn’t understand what the valuation means to their retirement.

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