Time to sell? Plan for lifestyle, longevity issues

Maybe this is a good time to get out:

* The economic clouds continue to darken.

* Too many customers are taking longer to pay than you think they should.

* A key supplier is taking longer to deliver.

Let's sell the business and jump start the retirement plan.

Except ... Jim King sees too many business owners who got out early, then "got sick of golfing every day and discovered, five or six years later, that their contacts were gone. They needed to get back in, but had no contacts."

Except ... Says Barb Regnitz, you might need a plan B to leave now: "2008 is a hard time for buyers to find financing."

King and Regnitz are financial planners. Regnitz is vice president investments at the Raymond James office in Bartlett; King is an adviser at Balasa Dinverno Foltz LLC, an Itasca-based wealth management firm. Both work with business owners.

Both agree that the business owner's thought process is every bit as important in retirement planning as are the numbers. Setting dollars aside for the moment, here are two issues King and Regnitz think you should be thinking about:

Lifestyle. The first issue to confront may be what you're going to do with all your newly found free time. The typical business owner's personal goals "are entwined with the business," King begins. "Business owners have been successful because they love what they do. Will golf and travel sustain your interest?"

"Your business has helped stimulate your brain (for many years)," King continues. "Once you stop working, how will you fill that void? What happens if you have the means, but not the passion (to get involved in something that will give you a reason to get up every morning)?"

King suggests, therefore, that perhaps the first questions to be asked, and answered, are "What does retirement mean? Will you work three days a week - or walk out the door and never look back?"

Longevity. Regnitz' initial assumption is that at least one of a married couple will live to 92 - and, obviously, will need money to live on. She also throws long-term care issues into the sell-and-retire planning discussion.

When she asks about their exit plans, too many business owners respond that they plan to "work until they're 80," Regnitz says. Although advances in health care may make us think we'll be capable of working until 80, Regnitz knows that "Business owners get tired. They get burned out. They can't maintain the intensity."

Then suppose this is the year you turn 80. If you can sell, Regnitz asks, will you get enough to sustain your retirement? The necessarily uncertain answer to that question is one reason Regnitz thinks retirement planning should begin "three to five years" before your anticipated exit date.

Next week, we'll dig into the numbers' issues.

Questions, comments to Jim Kendall, JKendall@121MarketingResources.com.

ˆÂ© 2008 121 Marketing Resources, Inc.