Sell or Buy Business with goal of Hybrid Retirement

Owning a business can be a very rewarding experience.  Many will buy an existing business or start a new business with the thought of building the business to the point that it is a successful viable entity that they can sell and live comfortably on the proceeds.  There currently are millions of small business owners in various stages of planning the exit of their business.

I want to sell my business so I can retire comfortably.  There are also millions of aspiring entrepreneurs that are considering buying or starting a business with the goal of building it and growing it to the point they can sell it and retire comfortably. It seems so often when discussing what one does it is described as working or retired.( In today’s economy unemployed, looking for work is another status).

I beleive there is a  status between working and retired, and I refer to it as Hybrid Retirement. I certainly don’t see myself as any retirement expert or financial planner, but I have been thru the process of selling my business that I had for 20 years  and have developed my own views on retirement that possibly one going thru the daily work day does not have the time to consider.

My current profession is as a business broker in Florida. Within my community I am surrounded by retired people, and also after the sale of my business I did take “some time off”.  As a business broker I speak to many business owners considering the sale of their business. One of their top considerations is “If I sold would I have enough to retire?” .

 Why not aspire to Hybrid Retire?

I personally think the majority of those currently working full days either employed or as small business owners look forward to the day they can retire, stop working, and spend the rest of their days fishing, golfing, or hobbies. Of course your age at the time of cashing in can greatly affect your decision process. If you are 75 years old, maybe you say enough is enough and just head to the golf course.  But if you are fortunate to be successful and exit in your 40’s, 50’s or maybe even your 60’s your perspective, and needs could be greatly different.

The thought process for someone thinking of selling a business goes something like this:

I think I need to sell my business, walk away with $500,000 and that will be enough for me to retire.  But what if you had someone that would buy your business and allow you to walk away with $400,000?  Maybe this is a good time to entertain such an offer and consider Hybrid retirement.

Hybrid Retirement

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If you believe you need $50,000 per year to live off of, and the sale of your business may give you $35,000 to live off of, should you walk away or consider.?  Many small business owners get overburdened with the responsibility of owning a business, and really want to sell those responsibilities away to others.   Maybe making the $25,000 monthly payroll or covering the $100,000 per month fixed overhead cost month after month just gets to be too much.

Perhaps you can consider upon the sale of your business,  you can find another business to buy, possibly one that you have aspired to do for years, or possibly work for someone, under terms conditions that fit your lifestyle.  But this second business you don’t need to make that high monthly expense, and now you are supplementing the proceeds you have from your sale, and what you need to draw from the business is a lesser amount.  “Needing” to make $15,000 per year instead of $50,000 can be somewhat liberating!

Why Hybrid Retirement?

  • Do you really know that you can “do nothing” after working for 20, 30, 40 + years
  • You have someone looking to buy your business near the price you think you need.  maybe consider the offer and plan to supplement the difference with a second career, part time job etc.
  • This is an opportunity to build a profession around your lifestyle, whereas before you may have had to try to build a lifestyle around your business.
  • Are you really prepared to try to live off a “fixed income”- supplement that with something you aspire to do.

I think currently due to economic condition there are many small business owners delaying the exit / sale of their business because the recent performance of their company may not allow them to achieve the “walk away” money they believe they need to retire comfortably on.  There also are eager entrepreneurs ready to start a new venture with hopes of one day selling and retiring off the proceeds.  Maybe planning for both of the above scenarios can best be addressed by allowing yourself to consider Hybrid retirement.

Number 1 Reason For Selling Your Business

What is the Number 1 Reason I hear when speaking to Business Owners about selling their business?-  Why are you looking to sell your Business?  — ” Because  I Am Ready”.     For those of you who have owned a business for any period of time this is a response that is fairly easy to understand.

I am a business broker based in Florida (and business owner)  and speak to many prospective buyers and sellers of business and understanding  the “Why” for both parties is so important in assisting the buyers and sellers of businesses.  I really think that most people that have given a fleeting thought to buying a business believe that business owners want to sell their business and therefore something must be wrong with the business.  Actually I am currently working on selling a Landscape Business in Florida.

Business Broker

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The business owner has a  good quality business for sale, good cash flow, a comfortable lifestyle.  He has owned the business for x years and is “ready to do something else”.  He will be relocating out of state, he owns a successful business he is looking to sell. Recently we spoke about the potential purchase of another business in an unrelated field and his hesitancy about buying a business because why would someone sell a “good” business- .  And this comment is coming from someone selling a “good business”.

I also am currently helping an owner of a Computer Service Store For Sale who`s revenues are up 30% over last year, Profits are up 20% plus and is seeking to sell his business at less than 1 times annual adjusted cash flow.  He also is anxious to start a new business opportunity with a close friend, and that endevor is awaiting the sale of his business.  A good business at a good price and the owner is “ready to move on”.

Solid Reason For Selling Your Business

Good businesses get sold for very good reasons.  Being “ready to do something else” is a good reason.    A seller of a business needs to be ready to sell.  Really- you only really exit your business by 2 means.

1. By your choice-your timeframe, your plan.

2. Not by your choice– closing due to business failure, business conditions, bankruptcy,Forced Sale.

Granted there may be certain undesirable business or personal events that prompts one to “be ready”.  A business owner may have additional employee problems and decide that enough is enough and that is the impetus to sell ones business.  New frustrating regulation, customer problems, and any one of numerous  problems a business owner may face may be  the “final straw” and induce a business owner to pursue the sale of the business.

But again for any  business owner that has owned and managed a business for an extended period of time problems such as these come and go.  Business can be going quite well and the owner may just be ready to move on.  Actually selling a business while the business is doing well is a well thought out exit strategy for a business owner.  And yes problems can and, do come along with the business.  Problems within the business does not make a business a bad business.

A business owner may “just be Ready” to:

  • retire
  • try  something new- a second career
  • want to move or relocate
  • Just be done running the business I have been running for the last 20 years

I am not aware of the existence of a Perfect Business. Even the best of business opportunities will likely contain issues and or undesirable situations.  But if you truly want to own your own business and move into the role of business owner- Understand that good business are being sold by business owners that are just ready…. to move on.

7 Ways to Improve Your Business that Cost No Money

It is the norm for Small businesses, startup, new ventures to struggle due to limited financial resources.  There are so many efforts that can improve your business and produce results that are little or no cost.  We all want results, but at what cost ?  Did that $1000 investment or expense produce $10 results?

Part of my profession as a business broker involves consulting with both buyers and seller of business.  I also provide consulting services to businesses outside my role as a business broker in Florida.  Rarely do I experience a discussion based upon “I have too much cash flow to deal with”.  Small business owner  and entrepreneurs are constantly seeking ways to improve thier businesses with limited resources.  Below are a list of several tactics and efforts a small business owner may take that cost little or no money and therefore the Return on Investment ( ROI)  is extremely high.  There are many other practices and efforts that can be utilized outside of the below short list, hopefully this list can change the line of thinking of a business owner from “I wish I could do something but I don’t have the money” to:

What Can I Do To Improve My Business With Limited Or No Money

1.Look at your company from the perspective of a customer.   Can you do that?, can you pretend you are a customer trying to do business with your company.  You send an inquiry via email, you place a call into your company- what happens?.  We all have dealt with companies that customer service seems more like “How to effectively get a customer off the phone”  instead of ” I wont let you hang up the phone until I know I have completely helped you to fulfillment”  IS it a pleasant experience to do business with your business?

2. Attempt to surround yourself with more beneficial  synergistic strategic partners-

As a business broker I have various strategic partners that allow me to best assist my clients.  These professionals include, Attorneys, Accountants, bankers and Financial people.  Not so long ago I relocated to a city 5 hours away.  Among other things, I needed to develop a new “team” that I could rely on that help me help my clients.  I researched banks that do a lot of SBA loans to small business, migrated thru the company website, found a point of contact that I had an interest in meeting with, sent an email, and got an email back saying “going on vacation back in 2 weeks, call me then”.  I proceeded to pursue a relationship with someone that would call me back., passed over this prospective strategic partner and found someone that I feel may develop into a mutually beneficial business relationship. My clients will benefit from my valued strategic partners.

3. Use the Internet more

Improve Your Business

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  • post a blog- how much does that cost?
  • post a tweet about  a sale, a special or event- We’ve all heard/read that this can be a good idea- just do it.
  • check out a site such as and see if someone can do something for you for $5.  Are there other sites that facilitate low cost solutions? Can you afford to make a $5 error?
  • Try something you haven’t tried- a video, guest blogging, join more related forums or user groups, start a group.

4. Educate yourself– take some time out of your day to read other related blogs info on your industry or specific area of focus. Commit yourself to learn your own financials better than you presently do.  Again the ROI on your time invested in this can be quite high.

5. Go to a network meeting– there are several available in most communities that are either free or cost a couple bucks.  How much could you benefit from making that “right contact”.

6. Consider a Freelancer–  Are there some functions/task that you currently are having performed that may be done more cost effectively thru an outside source such as a free lancer.  Open your mind to it.

7. Treat all customers, prospects, employees, vendors with respect and integrity– The ROI on this no cost effort is immense

Dont ever stop trying something different.  I have utilized the above items in my various business ventures throughout the years and still utilize them on a regular basis.  If you are running a business, buying a business, or growing a business these low and no cost business practices will result in very good return on investment and usually all it takes to get these returns is to consider them and just do them.

Most Important Step to Starting,Running, Buying, or Selling a Business

You are looking to Start a Business.  You are Running a Business.  You are Buying a Business.  You are Selling a Business.  What is the most important step in any one of these ventures, And no the answer is not having unlimited deep pockets. To start, run, sell,or buy a business you need to understand that business.  You need to understand not only the operational side of your business, you need to understand the financial side of your business.

I am a business broker in Florida and I help people buy and sell businesses. (and current and former business owner)   This last week I completed a very busy week of helping an out of town business buyer visit several different businesses.  Our intent of visiting these multiple businesses was an effort to understand the businesses. To buy a business you have to understand the business.  A small business owner truly needs to understand the financial health of their business.

Running Your Business Successfully

Many, Many Many small business owners DO NOT understand the financial side of their business.  Do you feel as an entrepreneur you need to understand the difference between a debit and credit or if you buy something if it should be a capital purchase or an operating expense.  So many small business owners and entrepreneurs run their business using their gut as their guide, they can feel if their business is going good or bad.

Other small business owners look at their checkbook- if there is money in that things are ok. On the other side you may have a very successful business, you buy several new truck and new equipment with cash every year, you have very little money in the checkbook and “feel” you have an unsuccessful business. You could be very wrong.   And yes it is also very easy to hire a CPA and or accountant and send all the monthly records to them, count on them to sort thru them and have them generate a report for you to maybe glance at and file away.

Hire An Accountant

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Your CPA or accountant is a great place to start the learning process. The more you know, the more effective they can be to you.   Your  Balance sheet and your Income statement tell your companies story.  You may feel your company is healthy, or improving, or getting better, or getting worse- your balances sheet or Income statement (Profit/Loss Statement) will tell you in a factual manner.

You need money for your business- you go to a banker or financial institution to get money, do you think they will listen to you tell them about your business and loan you money based on that.  they will use your company financials to make that business decision.  A few years ago banks I had worked with strongly considered your balances sheet to make loan decision.  Now-a- days both Balance Sheets and income Statement both are a strong part of that evaluation.  Why is that?.  Understanding the “whys” about your business is important to your business.

In the preceding scenario a business may have a strong balance sheet due to significant assets like real estate owned or equipment owned by the company.  But in current economic conditions the companies Income statement show  that the business sales are down 25% and and shows losses for the last year- lending may not occur.  The banks may not be all that excited about the fact that you own real estate thru your company.

The business buyer I was working with flew in town for 3 days for him and I to visit businesses.  Most of the small business owners we visited had good businesses.  Without divulging any confidential information, they all showed cash flow in excess of $200,000 per year.  They (the respective business owners)  all said they didn’t really understand the financial side of the business, but “here our our records for your review”. (after confidentiality agreements were signed) They could speak for hours about their customers, employees, procedures and ideas.  Questions regarding financial information were usually answered with  1 or 2  brief sentences.

Buying A Business – The Right Way

The buyer I was working with was a very educated buyer, a President of a publicly held $40 Million company , and 30+ years of experience.  He had looked thru maybe 30 businesses to narrow down visits to less than a handful.  He and I both knew that to buy a business, he had to understand the business. We spent hours discussing the financials of the businesses.  

You as an entrepreneur that is starting a business or running a business may someday want to sell your business.  Understanding the true financial condition of your business is the 1st step to improving the financial condition of your business.

Buying a business is a very effective way to expand your customer base and Revenues. knowing how to read and understand the financial statements of others could be the difference of a business acquisition that is a success or a failure.

And when an educated buyer approaches you about buying your business, you provide the business buyer your Balance Sheet, your Income Statement, and your explanation and understanding of the true financial condition of your business may be the difference in someone buying your business at a good price or passing your business over to pursue other businesses to buy.

Running Your Business when Disaster Strikes

Running a small business is full of daily challenges.  The problems small business incur are both large and small.  Businesses are not run within a vacuum.  Sometime as business owner we create our own problems.  Other times problems immerse themselves upon the business at no apparent doing of the business.

Dealing With Problems

A business owner needs to be able to deal with problem no matter the source of these problems if they wish to sustain. Disasters such as Hurricanes, Tornadoes, Cyclones, Tsunami. Mudslides, Monsoons, Terrorism, Floods, Fires occur.  They always seem to affect someone else.  “I really dont need to plan for a disaster because it always happens to someone else”.

I was that small business owner that was that someone else.

My business was struck by an arsonist…twice …  that caused almost $1,000,000 in damages… while I was bedside in the emergency room of my 10 year old son that was injured in a bike accident… while my wife was 7 months pregnant.

There are percentages and statistics available that speak to how many businesses never survive a major fire and those numbers go from 50%-80%.   We had 2 major fires withing 3 months of each other. I have not seen any numbers on those that survive 2 major fires.

I, with the help of so many managed the company thru those difficult times, ran the company for another 10 years, sold the business, the business continues to operate and I further my profession as a Business Broker.

The Impact Of A Disaster To Your Business

I would like to point out a few of my observations as I went thru this very difficult time that ultimately ended with the trial and conviction of a repeat arsonist… that ended up being a key employee.

1. You do not work thru a major disaster by yourself.  I was assisted by my wife, my family, my employees, my friends, my community, my competitors.  (One competitor allowed us to operate out of their facility during the middle of the night when their plant was normally un-occupied).- Others want to help, let them help.

2.  You think you currently multi-task as a business owner, and then you find out what you are really capable of.  Normally you are dealing with your customers, employees, vendors, facility, agencies, financial all at the same time.  Now add in restoration contractors, Media, insurance agencies, fire Marshall’s, investigators,lawyers,police chief.  Everything very fast,gets very busy, and you thought you had been busy before.  Somehow our situation became a rather big story in the media.  While dealing with the immediacy of the fire, calls were coming in from local TV, radio, Associated Press and Newspapers, and to find  5 minutes to speak with them became impossible.

I originally considered the media request s very low priority, but after getting home that nite at 10pm I had about 50 messages on my home phone of friends/acquaintances that had seen the fire on TV.  These people were part of our customer base, and had me worried that our customers assumed we were out of business. I felt it was important to get the word out that the company is not done.

Business Media Coverage

I got on the phone and did a couple phone interviews with Associated Press, and scheduled time for the local TV crews to come out with cameras and interview.  The focus of the TV news piece was on our intent to continue our business and continue serving our customers. After watching that report on the 6pm news, I think that report was instrumental in allowing our customers to see our intentions. I think its normal to seem overwhelming.

3. Look pass the disaster. Visualize your business not as it is during the disaster, but where it will be in one year.  This can be easier said than done.  may well wishers would tell me things like “that that doesn’t kill you will make you stronger”  at the moment of hearing that, during a crisis, sounds somewhat hollow, but years removed from the crisis you can see some merit.

4.  When you have a business and a disaster strikes, the line between business and personal becomes very blurred.  We are all people first and businessmen second.  Families are affected by disasters, people are affected by disasters, lives are affected by disasters- businesses get caught in the fallout of a disaster, but the importance of the business in a disaster is really a very distant second.

I am a Business Broker in Florida USA.  My 8 year old son (then) is now in college, and while he once layed in the hospital for 8 weeks with tubes, and needles stuck throughout his body , he now is bigger, faster, stronger than I (andbeing a teenager, I know he will never read some of Dads boring blog stating such), My daughter that was born 2 weeks after the 2nd major fire is  a healthy beautiful teenager.

I help people buy and sell businesses.  Buying and selling a business is SO much more than financials and industries.  It can be a life changing event.  The emotional and the personal side of buying a business is very very real.  I enjoy the financial analysis side of a business acquisition,  but I know, I really know its the other stuff that is so much more important.  I feel I understand the mechanics to a life changing event.