For many owners of independent construction firms, selling their business is more than an exit strategy; it is the cornerstone of their retirement plan.
If you simply are not emotionally ready to sell, if there is still fire in your belly — enough fire to fuel your continued investment in the company — or if you ultimately want to leave the business to family members or employees, then you may not be in a position to sell your business — yet.
With over half of today’s 9.5 million owners of established businesses reaching the retirement age of 50 years old or older it is likely that many of you will be ready to leave your business within the next decade or so.1
Determining your exit plan well in advance of your departure gives you and your advisors the time necessary to make your goals a reality.
A successful business exit plan achieves three important owner goals: achieving financial security, identifying the right successor and minimizing income tax.
“That won’t ever happen.” That is what I told my father-in-law, Ralph, every time he wanted to discuss what I should do if he were to pass away before his father did.
Most construction business owners will spend a lifetime making sure their businesses succeed. After all of your hard work, do you really want to leave the fate of your business in someone else’s hands? As it is likely your largest asset, you’ll want to ensure your business is protected through a detailed estate plan. This plan should focus on minimizing estate and gift taxes as well as protecting your wealth for your family.
Statistics indicate baby boomers account for more than 50% of the construction industry. That means half of owners, along with their skills and knowledge, are headed towards retirement. Even more alarming is only half of those owners have a succession plan. If your company faces a disruption or change in ownership it reduces its chance of survival to only a small percentage. Even owners who don’t have an immediate retirement on the horizon need to have a plan.
You’ve done it. You’ve built a booming construction company and now you’re ready to relax. As a business owner, it’s important to plan your exit from the company years in advance to ensure you can depart with confidence. How will your exit impact you and your family?
Less than a year. That’s how long it took a successful construction company to permanently close after the owner unexpectedly passed away. Before his death, the company was thriving. But without a business continuity plan in place, the business didn’t survive a year.
Anita specializes in business planning, succession planning and estate planning for closely held businesses and high net worth families. By guiding clients through estate and gift, retirement and tax strategies, we help them meet business goals and plan for near term and future needs.