• Meet the author


    Eric R. Voth

    Like you, I have experience as an independent business owner.

    During the course of my career, I’ve been personally undertaken …

    • The startup of 10 independent businesses.

    • The purchase of five independent businesses.

    • The sale of five independent companies (two of which were actually mergers).

    • The startup of four franchise operations.

    • The loss of my investment in four independent businesses that were unsuccessful.

    These experiences allow me the unique perspective of being able to empathize with you as you contemplate the sale of your company. I’m familiar with the mix of feelings and emotions that sometimes accompany such thoughts. I’ve had them myself.

    This introduction is designed to acquaint you with my background as an “in-the-trenches” business owner. Perhaps you can identify with some of my experiences.

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    Get your nest in order

    Time to celebrate National Save for Retirement Week.

    Yes, it’s another “official” designation designed to raise awareness about an issue near and dear to somebody’s heart.

    And if you own a privately held company, this ought to be an issue near and dear to you.

    Congress this year did officially designate the week of Oct. 18-24 National Save for Retirement Week.

    At its Web site, IMCA-RC says, “Research shows that more than half of all workers in the United States, 53 percent, have less than $25,000 in total savings and investments, excluding their home and defined benefit plans.”  (Source: 2009 Retirement Confidence Survey, Employee Benefits Research Institute.) One curious side effect of the recent deep recession has been an increase of personal savings, according to other recent research. As banks have tightened credit, consumers and businesses have taken on less debt and are conserving more cash.

    Many small-business owners expect their business to be their retirement savings plan, only to find their plans undermined by unexpectedly severe downturns (especially recently) in the economy or other circumstances. That’s called putting all your eggs in one basket. But even for private company owners too small to have pension funds or 401(k) plans, there are alternatives to the all-or-nothing approach to owning and selling a business.

    There are, of course, IRAs – individual retirement accounts – both traditional and Roth. There are other plans that offer different benefits and limitations under tax law as well – Keogh plans, SEP (simplified employee pension) plans, and others.

    Your individual circumstances will dictate what sort of plan works best for you. If immediate tax deferments are important to you, a traditional IRA might be a good fit. If you have good cash flow now and prefer to have tax-free withdrawals in retirement, a Roth IRA might be the right solution. You’ll need a competent financial adviser (and save the “commissioned vs. fee-only” debate for another forum). Accounting and legal advice are also important, of course.

    But the main point of all this is don’t wait. Time is money and that old saw is truer now than ever when it comes to a sound investment strategy.

    Just as selling your privately owned company requires planning and due diligence, so does planning for life after business ownership.

    It might sound counterintuitive but 2008 was an excellent year to enter the market for investment in stocks if you had the stomach for that roller-coaster ride. The payoff came in 2009 as Wall Street rallied from its lows and now has many more investors poised to re-enter the market. Those investors who didn’t panic as the market plummeted in 2008 are now being rewarded for their patience, although Wall Street’s recovery is far from complete.

    dollarsignHere’s a recent summary of an actual investment portfolio. At the end of 2007, Investor A’s account holding a diverse mixture of value and growth stock funds (and a Standard & Poor’s 500 Index fund) was worth about $118,000. By the end of 2008 it was worth less than $62,000 on paper. If Investor A had sold his holdings then, he would have experienced a loss of more than $55,000. Instead, he sat on his holdings and now they are worth about $85,000.

    If he had continued infusing money into those holdings (remember: buy low, sell high) he would have enjoyed even greater returns on his investment.

    As always, individual investment results will vary and past performance is not necessarily an indicator of future results.

    More on retirement saving next time.

    Eric R. Voth is a serial entrepreneur, a private investor, consultant, and writer. He is author of How to Sell Your Privately Owned Company, a Basic Guide for Independent Business Owners, Baby Boomer’s Edition. Eric and his colleagues help a business Seller prepare and groom his or her company prior to offering it for sale or merger – then guide the owner through the actual process. He became involved in this field as a result of merging his own company in 1993.


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