“My Business IS my retirement.” Really?

“My Business IS my retirement.” Really?

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I usually begin my talks at NAMM or sharing groups with three questions:

1-How many of you are relying, on the proceeds of your business to help fund, at least in part, your retirement?
Half the hands go up. I jokingly say, for those that have not raised their hands, you either have a rich spouse, are expecting an inheritance, or  plan on selling real estate, because we both know you can’t live on social security alone.

2- How many of you know how much monthly cash flow you’ll need from your business or other sources to support your personal retirement? Fewer hands go up.

3-And how many of you know how you’re going to create the cash flow in a tax effective manner, and know what you will do in your personal life after you exit?  Here hardly anyone raises their hand, but I do usually hear a few laughs.

The primary business continuity document, your lawyer will prepare is called the Buy/Sell agreement. This document ought to manage the risk of the 5Ds: Divorce. Death. Disability. Disagreement.Departure.

The Info graphics below (compliments of the Principal Financial Group) highlights the key components of the Buy/Sell. If you already have a Buy/Sell agreement in place which is not addressing all of the 5Ds stated above, your documents may be worth re-visiting.

InfoGrahic part 1 Principal Group Buy-Sell

InfoGraphic part 2 Principal Group Buy-Sell

 

Written by Jaimie Blackman

Jaimie Blackman

Jaimie Blackman has created Sound Financial Decisions ™ powered by MoneyCapsules®, to help guide business owners through the complexities of succession planning.

Jaimie writes “Smart Succession”, a monthly column in Music Inc., and also writes a bimonthly column for Canadian Music Trades magazine. He has spoken at NAMM U Idea Center, and at Yamah’s Succession Advantage.

As a financial literacy educator he has taught at New York University and has lectured at the 92nd Street Y, Marymount Manhattan College, and CUNY.

As President of BH Wealth Management, Jaimie also helps his clients implement investment and insurance solutions which are aligned to their personal values. Visit bhwealth.com to learn more.

To subscribe to Jaimie’s Succession Success: Insights for Music Retailers, visit moneycapsules.com.

The purpose of this post is to educate. Our content should not be construed as advice. If legal, tax or other advice is required by the readers, professional advice should be sought.

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