Tips for setting the stage for a successful retirement from your business.
Do a reality check: A lot of business owners have an inflated idea of what they could get from a buyer.
Weigh your nest egg: Could your current savings support you even if you can’t sell your business for what you hope to get for it?
Be realistic about your stamina: How long you can you continue to put in your current daily effort?
Anticipate change: Even if you could keep going for another 10 years, will your niche industry or your business still be viable and are you diversifying?
Get a manager: Freeing yourself from daily hands-on tasks can help you grow the business, which will also be more attractive to a buyer because it would be a going concern if you left.
Plan a tax exit strategy: Individual business owners are entitled to a lifetime capital gains tax exemption of $750,000, but you can multiply the exemption by issuing shares in the business to spouse or children.
Don’t limit yourself: Under an Individual Pension Plan set up by a company for the owner, the contribution limits are much higher than on personal RRSPs and the company gets a deduction.
S ource: James Wong, author of The Transition Experience