Retirement Onboarding - Success & Risk

Question: “As the owner of a family-owned business, much of my retirement plan seems to hinge on the company's continued success after my retirement. How do I keep my retirement plan focused on me, while still making sure my succession plan for my company is successful?”

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Contributors David Brown

Answer: Nearly all of the 6 common exit strategies for contractors require the business to continue being successful for the outgoing owner to get paid. There are a couple of things that can be done to help ensure everything stays on track.

  1. Have a clear plan for your retirement, knowing exactly what you need and by when. As this question is mostly about the financial side of the plan, this is what is critical.
  2. Part of that plan must include what will be done in a couple critical scenarios.
    1. If the business has a bad year and can't afford paying you for 1-2 years.
    2. If the business is heading down a path toward failure
  3. Have simple reporting structures and the equivalent of “loan covenants” built in that will trigger you well in advance of either of these two scenarios.
  4. 4. The best insurance against these is turning the business over to a management team with the right capabilities who you trust and who trust each other.

This is Part 14 of a 15-Part Series


Topics Covered in the Series Include:

  • Transferring Your Knowledge to the Team
  • Future Vision for Your Company
  • Communicating Family Succession Plans
  • Issues Specific to Contractors
  • Post-Retirement Business Involvement

Interested in learning more? Contact us.


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