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BUSINESS WEALTH SOLUTIONS,LLC
Joan M. Ridley
Pres., CFP™, CEPA, CBI


2911 Turtle Creek Blvd., Suite 300
Dallas, Texas 75219


E-MAIL:  info@businesswealthsolutions.net
PHONE: 214.692.9192
FAX: 214.523.9001

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What if You Don’t Want to Work Forever

By

Joan M. Ridley, CEPA, CBI, CFP®

If you don’t want to work forever, there are two things you can do: 1) Assess your ownership transition options and 2) commit to and execute a feasible plan. It all seems so simple. But what most business owners call a plan is actually a wish or a hope. The good news is, with a bit of reality testing, these wishes or hopes can become a plan, and you will remain totally in charge of your future.

So why don’t most business owners plan, or why do they wait until it’s too late to get started?

Here are some possible answers to that question:

  • Shareholders cannot agree on a plan
  • Family issues impede their ability to move forward
  • Lack of awareness that the business needs to be sustainable before assessing their exit options
  • Employees have not been groomed for executive or ownership responsibilities
  • Cutting the cord emotionally is not so easy

Try an easier approach: work less but stay involved.

So, what if you just want to work less but have no desire to stop working totally? This is a fairly common situation. Hire a qualified CEO to run the business on a daily basis while you assume very limited and specific responsibilities. Here are some roles that you can fill even after you transition partial or total ownership:

  • Create and personally oversee a formal mentoring program for management and other employees.
  • Create a formal Board of Directors or Board of Advisors (depending on the size of your business) of business leaders who are independent of the business. As the Chairman, you can have a say in the strategic direction of the company.
  • Assist the CEO on limited special projects on a consulting basis.

There are a few things you ought to avoid.

  • Marketing and sales. Leave these roles to the company’s sales and marketing people so they can sharpen their skills and become the new face of the company.
  • Performing other activities that are better left to the employees and management such as writing a business plan or directing operations. Your business will never be sustainable without you if your fingerprints are everywhere. If you do not let go, you could create a morale issue resulting in the loss of valued employees.
  • Receiving compensation and perks that are excessive for your new role. Excessive compensation will drain cash from the company that ought to be reinvested in initiatives to grow the enterprise and retain valued, key people. There could also be tax liabilities if the IRS challenges your compensation.

Another alternative

If the idea of changing your role in the company is not appealing, there is another strategy to consider. Pull out as much cash as possible, ideally on a tax-efficient basis such as by maximizing your contribution to a tax-deferred retirement plan. Invest that cash in a liquid, diversified portfolio. Either way, you have choices. It’s just a matter of making a plan and sticking with it.

Copyright 2017 Joan M. Ridley


  Joan M. Ridley is President of Business Wealth Solutions.  Joan is a business coach who helps business owners create company sustainability in preparation for management or ownership transition. She is a Certified Business Intermediary, Certified Exit Planning Advisor, and a Certified Financial Planner™. In 2013, she received the first Excellence in Exit Planning Award conferred by the Exit Planning Institute for her pioneering contribution to this new discipline. She is the Founder of the North Texas Chapter of the Exit Planning Institute.

To schedule a complimentary meeting to learn how we can help you get where you want to go, call (214) 692-9192. 
For more resources, visit www.businesswealthsolutions.net

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