Investment Updates
Succession Planning For Solo Businesses
Published Wednesday, January 23, 2008 at: 7:00 AM EST
You are your company, from CEO to receptionist. While that keeps costs low and affords considerable operating flexibility, flying solo makes succession planning problematic at best. There is no “& Son” in the company name to suggest who will take the reins when you retire, and you have no employees to buy the business from you. When you leave your business, it may cease to exist.
That’s not what you want to happen, of course. You’d like your company to have value beyond your involvement in it, so you can translate years of hard work into a sizeable asset for retirement and your estate. That’s what succession planning can achieve. With a good plan in place, your business can give you (or your estate) one last payout.
A simple sale of a solo business, however, can be difficult to arrange and may yield a selling price far below what you believe the company is worth. Buyers may be skittish, worried that your clients won’t stick around—particularly if your business revolves around a personality-driven service relationship.
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