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Mistake #3 -
Retiring on the job
Business owners
sometimes retire on the job. As they get older, they invest less
money in the business and they try fewer new things. It's almost
as if the business itself is starting to retire.
Centering recently
helped a client buy a business where the owners had retired on
the job. The business was owned by two partners. For several
years before the sale, the partners did little productive work.
The business was in a holding pattern during that time - no
serious problems but no new products or services.
During those
years, the partners continued to receive high salaries. But when
they sold the business they learned that retiring on the job,
even with a high salary, can be very costly. When a business
stops improving, its value declines sharply. The decline in the
value of the business was much greater than the salaries the two
partners had paid themselves.
Centering helps
its clients avoid this problem by showing them how their
business looks through the eyes of a prospective buyer. We help
our clients understand the importance of investing time and
money in growing the business. Our clients don't retire on the
job.
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