As the owner of a privately held business the hardest transition you will ever make is from owner/operator to investor/wealth manager. It sounds easy, doesn’t it? In reality, for many entrepreneurs, the key conversion from owning a business to investing and living on the proceeds of the sale can be quite difficult.
It is for this reason we strongly recommend to our clients that they begin working with a wealth manager long before we close a deal for them. In fact, in many cases, it is actually wise to hire a financial planner even before you hire us.
An experienced financial consultant can ask you the most important questions like:
Each of these questions is critical and impactful because they determine how much you will need to have at the end of your exit plan. What we have found most interesting throughout the years is that typically what most entrepreneurs think they will need post-business sale and what they actually need to maintain their lifestyle are quite different. And usually their estimates of what they require are on the high side! In other words, for many folks, the number they hope to get for their business at the end of negotiations is usually much higher than what they really need.
A skilled wealth manager can walk you through all of these questions and many more to determine exactly how much money you will need to have for the rest of your life. What is really fascinating, though, is how many of our clients eventually start up another venture post-sale, which is rarely done out of financial need. No, rather, these folks are generally serial entrepreneurs who cannot shake the need to start something new and grow it.
Either way, whether you are older and simply looking for a good beach location to spend the rest of your years, or you are determined to start something new, a financial planner can advise you well in advance of your liquidity event on how much you will need – and most importantly in today’s market – where to put it so it can meet your needs.
Generational Equity is NOT a wealth management firm. We specialize in creating liquidity for our clients. What we find amazing is how many of our clients do not have the advice of a wealth management firm. If 100% of your assets are tied up in your home and business, the assumption is you really have no need of a wealth manager. Nothing could be further from the truth. Quite often we recommend early in our process that business owners find and hire a financial consultant who can help them to prepare and plan for their liquidity event.
Here is an amazing statistic: More than 40% of small business owners do NOT have a retirement plan in place, according to the American College State Farm Center for Women and Financial Services. This is a tragedy that could have huge implications throughout the next 10-15 years.
So far we have only focused on the financial aspects of this business transfer. Quite often we find that the people most affected by the business sale are the spouses! Suddenly they have a significant other who for years was rarely around and now is underfoot all day long. This is another aspect that a wealth manager can help you discuss: What do I want to do with my spare time post-sale?
Again, many of our clients fill this void by starting another business. Others get involve in hobbies or philanthropy. It is all up to you, but given a million dollars and unlimited free time, what would you do?
Your answer to that question may actually surprise you.
Generational Equity works with regional and national wealth management firms throughout North America. But again, we are not in that business. We specialize in creating millionaires, but we are keenly aware of the responsibility we thrust on business owners who often are ill equipped to manage their newfound wealth.
For that reason we strongly urge you to begin working with a wealth management firm as early as you can. The sooner the better.
To learn more about Generational Equity and our exit planning services, please send us an email. We would be glad to get you started on your liquidity event and help you connect with wealth managers that can guide you post-close to ensure your financial and personal dreams are met.
Carl Doerksen is the Director of Corporate Development at Generational Equity.
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I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.Michael J Polarek, President, Paragon Packaging
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.Andy Graham, Vice President, Modern Heating & Plumbing
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.Robert Evans, President and CEO of Mealtracker Dietary Software
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.Jay Dinnison, Owner of Sharpe Mixers
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Terry D. Wickman, President, Keytroller
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.Michael J Polarek, President, Paragon Packaging
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.Terry D. Wickman, President, Keytroller
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.Robert Evans, President and CEO of Mealtracker Dietary Software
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”Karen S. Williams, CFO, BW Manufacturing
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.Pete L.
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!Andy Graham, Vice President, Modern Heating & Plumbing
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.Larry Moore, Owner, A Company Portable Restrooms
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.Jay Dinnison, Owner of Sharpe Mixers
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.Karen S. Williams, CFO, BW Manufacturing
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