Business Owners – Is There a Gap Between What You Have and What You Need for a Comfortable Retirement?

Michael Zoglio for BKBy: Michael Zoglio, a value-building consultant and mergers and acquisitions intermediary at Tower Hill Advisors with over 35 years of experience starting, buying and selling businesses for himself and clients. More information is available at

If you are like many business owners a substantial portion of your net worth may be tied to the future value of your business.  If you are planning your retirement, or for the transfer of ownership of your business to children, key employees, or to a third party, knowing what proceeds you will receive from the sale may be critical to your financial future.

Are you basing your retirement or estate plans on false assumptions that could delay those plans or put them in jeopardy?  Now, before entertaining prospective buyers, is the time to prepare.

Four important components of your business exit plan should be:

  1. Decide when you want to leave your business.
  2. Determine what amount of money or income stream you will need to live comfortably in retirement.
  3. Analyze the amount of income your non-business investments (stocks, bonds, real estate, etc.) will likely provide in retirement.
  4. Understand how serious and qualified buyers will value your business.

If a gap exists between what you need and what you have, take action now to close that gap. Some tax benefits cannot be applied too close to the sale date or after closing the transaction, and shoring up your value drivers may take time and resources.

Here are your income gap options:

  • Delay retirement.
  • Change your lifestyle in retirement to require less income.
  • Tweak your investment portfolio for a higher (possibly riskier) yield.
  • Take control and enhance the appeal and value of your business.
  • Or, a combination thereof.

Objectively understanding how your business will be valued in today’s dynamic market can better position you to optimize that value. If your time horizon for retirement or ownership transfer is at least three years away much can be done now.

Four steps to value enhancement:

  1. Establish your current business value range
  2. Uncover hidden tangible and intangible assets that will drive value
  3. Uncover hidden value detractors
  4. Set action goals that are measurable and accountable

According to a survey conducted by the Canadian Federation of Independent Business 89% of owners indicated that it was “very” or “somewhat” important to them to rely on the proceeds of selling their business as a way to fund their retirement.

Those intentions, combined with the findings of a Deloitte study report most owners do not know how to grow value in their businesses:

“…71% of small and mid-sized enterprise owners plan to exit their businesses within the next ten years, strongly highlighting the growing importance of enhancing business value. However, the challenge is that few organizations genuinely understand what actions they must take to achieve this goal…”  Deloitte

With a proper perspective and a plan, business owners have a unique opportunity to shape their destiny and successfully close the gap between what they have and what they need.

Interestingly, another benefit to this process is the finding that business owners become re-energized, re-focused, excited again about the prospects for their business whether they plan to sell soon or in years to come.

Begin the process now by taking advantage of the free offer to Bonita Springs Chamber of Commerce members of the Value Builder Score: a sale readiness assessment at  Use the Invitation Code BSCC-15 for special considerations. The assessment is confidential, free and will take about 13 minutes to complete online. Upon completion you will automatically receive a score on your business’ readiness to attain a premium price.

Evidence from over 16,000 business owners who have participated indicates that businesses that score 80 and above are valued at an average premium of 70% over their peers.

Discovering your business’ strengths and weaknesses, developing a plan, and attaining a premium Value Builder score can substantially impact your financial future.

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