Selling business. Early retirement.
Discussion
I'm 50, a sole trader and considering early retirement.
Given the following information, what would you do?
1. I would definitely not work past 60.
2. Future government legislation could negatively affect the business value over the next 10 years. It could also reduce profits.
3. Business profits are unlikely to increase.
4. I have been offered 10x annual net profit for the business.
The business has no debt.
I'd be stupid not to sell wouldn't I?
Given the following information, what would you do?
1. I would definitely not work past 60.
2. Future government legislation could negatively affect the business value over the next 10 years. It could also reduce profits.
3. Business profits are unlikely to increase.
4. I have been offered 10x annual net profit for the business.
The business has no debt.
I'd be stupid not to sell wouldn't I?
What happens if you live until 90?
That's forty years away.
Could you live on the proceeds plus your state pension which you won't receive until you are at least 67. (Currently £165pw)
(Assuming of course you have no other pensions, or are likely to receive a windfall from uncle Fred in Australia)
That's forty years away.
Could you live on the proceeds plus your state pension which you won't receive until you are at least 67. (Currently £165pw)
(Assuming of course you have no other pensions, or are likely to receive a windfall from uncle Fred in Australia)
If you worked until 60 and then sold the business at even half the price you would extend your income a further 5 years (but have to work 10 years to do that) so any chance that value would drop then the extra years you work are basically going to be paid at less than current annual rate...
If you can afford to retire / have something else to do / think that the value of the business may drop - take the deal
If you can afford to retire / have something else to do / think that the value of the business may drop - take the deal
There's a middle ground, too - you can stop running this business, if you feel this is the best time to cut it loose, but you by no means have to retire. You could go do something else, maybe take stock of things and decide if there's something else you'd like to do with yourself. It doesn't have to be a choice of "stick with this business" or "put yourself out to pasture".
10x net profit is an amazing deal for an owner managed company with flat revenue imo. Hard to say without more details, but small businesses with low growth can sell for as little as 2x earnings.
I would definitely take it . You can always reinvest in something active, if you get bored.
I would definitely take it . You can always reinvest in something active, if you get bored.
Trevor555 said:
Do it..
Too many of my friends are no longer with us, they never got to enjoy their wealth/retirement.
This IF the figures work for you. I sold my business and retired at 56. Lots of people said I was too young but I love being retired. You need to work out your finances , there’s no point in being at home and poor and you need interests to keep you occupied doing what YOU want.Too many of my friends are no longer with us, they never got to enjoy their wealth/retirement.
bernie56 said:
I'm 50, a sole trader and considering early retirement.
Given the following information, what would you do?
1. I would definitely not work past 60.
2. Future government legislation could negatively affect the business value over the next 10 years. It could also reduce profits.
3. Business profits are unlikely to increase.
4. I have been offered 10x annual net profit for the business.
The business has no debt.
I'd be stupid not to sell wouldn't I?
Calculate your yearly outgoings, I assume no mortgage? Will the cash last you 20 years or so?Given the following information, what would you do?
1. I would definitely not work past 60.
2. Future government legislation could negatively affect the business value over the next 10 years. It could also reduce profits.
3. Business profits are unlikely to increase.
4. I have been offered 10x annual net profit for the business.
The business has no debt.
I'd be stupid not to sell wouldn't I?
I did the same (as I couldn’t see a future in the business I had) but didn’t retire I just started something different that didn’t rely on me to a high extent.
DSLiverpool said:
Calculate your yearly outgoings, I assume no mortgage? Will the cash last you 20 years or so?
I did the same (as I couldn’t see a future in the business I had) but didn’t retire I just started something different that didn’t rely on me to a high extent.
I’d say the trick is to turn the cash into income. I live on income from funds, shares & bonds. Work on an income of 3.6% of your capital.I did the same (as I couldn’t see a future in the business I had) but didn’t retire I just started something different that didn’t rely on me to a high extent.
Rollin said:
I think I was being a bit misleading with the early retirement. If I sell this business, I do have another that I will continue to work part time until I feel happy to stop altogether. I also have a good pension at 60 (at present).
The one I would sell provides around 60% of my current income though.
I am trying to decide whether it's worth the risks and stress to continue to run the business for a further 10 years and hope profits are maintained, whilst also hoping it's worth something in 10 years time. I think it may be better to take the money and run.
Have you got your multiple logins mixed up?The one I would sell provides around 60% of my current income though.
I am trying to decide whether it's worth the risks and stress to continue to run the business for a further 10 years and hope profits are maintained, whilst also hoping it's worth something in 10 years time. I think it may be better to take the money and run.
I retired at 56, 18 months ago. Best thing I ever did.
Didn't have a company to sell, just shut down my ltd co. and took the cash. Now living on savings, investments etc and leaving my pensions until I need them.
I'm hoping I don't need 3.6% of my capital to live on. Certainly not spending that at the moment and in the last year my pensions and investments have grown by more than I've spent
Didn't have a company to sell, just shut down my ltd co. and took the cash. Now living on savings, investments etc and leaving my pensions until I need them.
I'm hoping I don't need 3.6% of my capital to live on. Certainly not spending that at the moment and in the last year my pensions and investments have grown by more than I've spent
keirik said:
I retired at 56, 18 months ago. Best thing I ever did.
Didn't have a company to sell, just shut down my ltd co. and took the cash. Now living on savings, investments etc and leaving my pensions until I need them.
I'm hoping I don't need 3.6% of my capital to live on. Certainly not spending that at the moment and in the last year my pensions and investments have grown by more than I've spent
You could invest the capital and spend dividend income of at least 3.6% (probably over 4). That’s what I do.Didn't have a company to sell, just shut down my ltd co. and took the cash. Now living on savings, investments etc and leaving my pensions until I need them.
I'm hoping I don't need 3.6% of my capital to live on. Certainly not spending that at the moment and in the last year my pensions and investments have grown by more than I've spent
Mr Pointy said:
Rollin said:
I think I was being a bit misleading with the early retirement. If I sell this business, I do have another that I will continue to work part time until I feel happy to stop altogether. I also have a good pension at 60 (at present).
The one I would sell provides around 60% of my current income though.
I am trying to decide whether it's worth the risks and stress to continue to run the business for a further 10 years and hope profits are maintained, whilst also hoping it's worth something in 10 years time. I think it may be better to take the money and run.
Have you got your multiple logins mixed up?The one I would sell provides around 60% of my current income though.
I am trying to decide whether it's worth the risks and stress to continue to run the business for a further 10 years and hope profits are maintained, whilst also hoping it's worth something in 10 years time. I think it may be better to take the money and run.
bernie56 said:
I'm 50, a sole trader and considering early retirement.
Given the following information, what would you do?
1. I would definitely not work past 60.
2. Future government legislation could negatively affect the business value over the next 10 years. It could also reduce profits.
3. Business profits are unlikely to increase.
4. I have been offered 10x annual net profit for the business.
The business has no debt.
I'd be stupid not to sell wouldn't I?
Get out now while there's an offer on the table , I knew a guy who was 59 , went to the doctors with a bad stomach and came out with a 6 month death sentence , died 3 months later . You only get one chance ! Given the following information, what would you do?
1. I would definitely not work past 60.
2. Future government legislation could negatively affect the business value over the next 10 years. It could also reduce profits.
3. Business profits are unlikely to increase.
4. I have been offered 10x annual net profit for the business.
The business has no debt.
I'd be stupid not to sell wouldn't I?
I've been semi retired since my 40s by the way , I'm no millionaire but I don't need to be , my life is great and I enjoy it to the full , many of my richer older friends don't enjoy theirs, and never will because they'll never stop trying to be rich !
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