Want out ready to Fire

[Slepp]

Wanted to say Hello! Enjoy reading all the posts for the last few years and decided to intro my self . I'm a type A small business owner that hit the over 50 crowd with a great stay at home MOM and a pre teen. I have worked since I was 16. The company I purchased from the previous owner after working 15 plus and 15 now as the owner . My issue is not the amount I saved but finding a buyer that will let me FIRE. Every offer is me working for another 3 years for wages that I make in a year as the owner. The company is broken into three corporations that could be split into a asset sale but I would take a hit on the taxes for my stock .I can't let anyone down that has worked for me. I do the 60 plus hours 110% all the time.
I realized as another year ticked away in my 50 s last week at a friends funeral. I never used a sick day in 30 years and average 5-6 days a year vacation. And when i'm on vacation I still answer calls or do business. Its time to FIRE but how do you walk away when the business owns you?

 

[Dtail]

Welcome Slepp.
Well perhaps the funeral is a reminder of time left for all of us is more valuable than overall monies. Nonetheless, understand it is not an easy situation for you.
I fired at 57 and wish I did it sooner.

 

[joeea]

My issue is not the amount I saved but finding a buyer that will let me FIRE. Every offer is me working for another 3 years for wages that I make in a year as the owner.

Its time to FIRE but how do you walk away when the business owns you?

If you set the price of your business low enough you can avoid having to work for 3 more years.

 

[Debinnov a]

I sold a small business a few years ago. I owned it for over two decades and was burned out. I listed my business online one day after returning from a great trip. I immediately started receiving inquiries and interest. (That site has since been sold, I believe. It was clued Merger Network) I received three offers in writing. Two wanted me to stay on for at least two years, which is the norm. One, only wanted me around for a month! It was slightly less money, but oh so worth it to me.

Make sure you know exactly what your business is worth. List with a reputable broker. Take less than market price in order to walk away sooner. Offer to stay on as a paid consultant as needed - available by phone to answer questions or offer advice.

I still can't believe the stars aligned for me and I'm enjoying retirement. I hope you can figure out a way to do it.

Sent from my KFTHWA using Tapatalk HD

 

[Stormy Kromer]

Slepp, you just described me. I gave my life blood to my small business for 31 years and sold it at age 50 to FIRE. It saved my sanity, my marriage and my health, possibly my life.


I knew my FIRE date and hired a person 3 years before my exit and trained him to run the place and on the closing date I literally got in my car and drove 350 miles to our new home. I wanted to sell to a person who could run the place without me and I found him, 3 years was about the right time.


If you're selling to an outside entity I would put a cash price on the business and walk out with what is left after taxes. I found that I needed to move away from the business to feel completely free of it, I think you know how a business can own the owner. In my industry it is very common for the previous owner to stay on board with the new owner for a period of time during the buy out. I didn't want to do that under any circumstances and I didn't have to, look for a buyer who will let you walk away. Be careful with any consulting offers too, If possible I'd recommend taking the money and walking (or running) away. Finding your own identity may take a while and it will be easier if you're no longer tied to your business. I was in a small town and my entire identity was associated with the business, staying wasn't an option if I wanted a personal life.


I sold my business to the new owner on a 10 year contract, financing the entire purchase price. I enjoy the capital gains taxes very much.


I sold out at 50, absolutely no regrets and have never once wished I had stayed a day longer.

 

[Slepp]

Thanks for all the comments and encouragement. The business and real estate was valued at 5.5 15 years ago and I had 10 year Bank/Owner purchase agreement that I paid off in five years. I would like to get my investment back at the very least. The company holds contracts with five to ten year terms. Some of the contracts have been regular for over 30 plus years.
Any future loan could be paid in 5 years for the next owner just maintaining the current contracts. This is the reason I hate to just walk. If I ride the contracts out for two more years and sell the re-estate and assets the take home is almost the same as taking a hit on a 5.5 asset sale. So I look at each year I work has a 500 K plus value . The problem is what good is the 500 K if your 6 ft under .

Thanks
Slepp

 

[Stormy Kromer]

It appears to me that your business is worth more than you think if it can be paid off in 5 years by just maintaining the current contracts.

Have you talked with a business broker ?

 

[Slepp]

It appears to me that your business is worth more than you think if it can be paid off in 5 years by just maintaining the current contracts.

Have you talked with a business broker ?

I used a broker several years back on rental leases . I found that I did all the due diligence and paid a hefty commission . My fear is keeping the sale quiet and do not want to alarm my work force. I'm sure a larger company would streamline and dissolve some of the redundant staff positions. I'm in a highly technical field that has a small pool to play in. We have always been at the top of our game for so long everyone wants to start a rumor. I understand the main value to the company is the people and I'm just the caretaker at the time.
Unfortunately when your in the position as caretaker they don't understand how much you value what everyone brings to the table to keep a company moving forward for 60 plus years.

 

[Stormy Kromer]

I'm sure you've checked into it, but I have to ask. Do you have a current employee that would be interested (and capable) to buy your business ?

You are right when you say that the new owner will run the business the way they want, and that would mean bringing in their own people and letting go any current employees that they don't want. Would you want to be working for them when this happens ? I think working for a new owner would be extremely difficult for you.

I had a friend sell a business for $27 million 22 years after starting it from scratch. He walked out the door with a big check and the next day the new company cleaned out the employees they no longer wanted, including the owner's son.

I admire your loyalty to your employees, but the only way you can guarantee them their jobs is if you continue to own the business. By the way, my friend also gave each employee a bonus of $1,000 per year served when he sold out. Nice gesture that was very much appreciated.

 

[MRG]

Your loyalty to you employee's is honorable.

A silly question. If it is you that keels over next week, month, or OMY who takes up the 60 hours a week? Who looks out for them if your 6' under.

 

[street]

Not sure what you are looking for in the sale but I know a guy that sold his business to his employees. Don't ask about the details but it worked out for them nicely.

 

[pb4uski]

A neighbor friend of ours sold his used-car dealership to two key employees who are quite a bit younger than he is. He kept ownership of the real estate and leases the building to them. He also finances their inventory. As a result, he is still involved but less than half time with a lot of flexibility of not showing up at the office if something else comes up or taking time off to travel. He seems to enjoy the new arrangement and I suspect will phase himself out in time.