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Four Steps to Maximize Your Business' Long Term Value

Share current LOB: SmallBusiness

Business owners rank maximizing the value of their business as the most important part of their retirement planning, according to SunTrust Business Owner Research. Consider the following four steps to help maximize the value of your business and the overall transition to retirement.

Step 1: Grow the value, so your business can be sold or transferred easily at a good price

Having a plan for building and monetizing your business asset well before you plan to leave your business should be a key part of your retirement strategy. You can build the value of your business by growing profits, strengthening cash flow and improving management processes. Ask your banker for a referral to a treasury management expert who can use leading edge tools, technology and expertise to improve your working capital utilization.

Step 2: Shelter more of your business profits and value from taxes

You can save and shelter more of the profits your business generates with retirement plans such as a 401(k) or by creating a trust that transfers your business asset with lower taxes. It has never been easier or more affordable to setup a retirement plan for your company. Ask your banker about simple and affordable online 401(k) products for businesses. It allows you to set-up a plan in under an hour and helps automate much of the paperwork associated with running a retirement plan.

Step 3: Sustain your business, so you can work longer

If you are like most business owners and plan to live off the income of your business as long as possible, consider finding ways to leverage yourself by bringing in a partner or developing management talent. According to SunTrust Business Owner Research, leveraging employees and other people is the top way for owners to create more free time. Management leverage will allow you to work longer in your business without burning out. It may also allow you to spend more time doing the things you love or managing business-provided benefits like healthcare.

Step 4: Seek out guidance to grow and realize the value of your single biggest asset — your business

Retirement planning is very different for business owners for many reasons. You should consider working on a retirement strategy with an advisor who can help you grow your most valuable asset: your business. A good business banker with a sound financial institution that is committed to your business can draw upon the wider range of resources you need to better prepare yourself for retirement, such as:

  • Systems for managing cash flow and finance
  • Estate, succession and contingency planning
  • Retirement plans
  • Financial resources

About SunTrust Business Owner Research: SunTrust surveys small business owners and advisors as part of its ongoing business seminars and symposiums. The small business owners attending these events include both SunTrust client and non-client business owners and are representative of the broad spectrum of businesses located in the SunTrust markets. The research cited in this report is extracted from these 5,425 small business owner surveys collected between 2007 and 2011.

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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