Questions Business Owners Should Ask Before Selling

In this episode of Transition Talks, Josh Ackerman shares the stories and experiences that inspired him to work with business owners navigating significant transitions. These tales illustrate the challenges and unexpected hurdles that arise when preparing for a business transition and underscore the importance of asking the right questions early in the process.

The Importance of Asking the Right Questions

Josh emphasizes the crucial questions business owners often overlook before making irreversible decisions. In a story where two business partners were ready to sell their business but hadn’t considered whether the sale proceeds would sustain their current lifestyle, Josh shares, “I realized there were questions nobody was asking these business owners before they made transactions they couldn’t take back.

The Identity Challenge

Many business owners, particularly those who have spent decades building their businesses, find their identity deeply intertwined with their work. It’s crucial to contemplate who you will be once you are no longer the boss. Josh highlights the importance of exploring this aspect, focusing on the questions that need to be asked before making irreversible decisions.

A Crucial Realization

Josh recounts a story about two partners preparing to sell their business. Despite receiving a seemingly good offer, a critical question about their post-sale financial stability revealed that the proceeds wouldn’t sustain their current lifestyle. This insight, stemming from Josh’s thorough understanding of their financials, helped them rethink their decision, leading to a more strategic approach to saving and growing the business value before eventually selling it successfully.

Planning for Retirement: The Personal Impact

A former client’s retirement journey highlighted the personal adjustments required post-sale. After selling the business and completing an earn-out period, the client faced a new reality where his wife had an established social life that he was not part of. This story emphasizes the need for business owners to consider their personal lives and relationships when planning for retirement.

Aligning Values with Capital

Josh stresses the importance of aligning one’s capital – time, attention, and money – with personal values. He notes that the hardest part isn’t the financial planning but rather defining what you truly want in retirement. Insights from his mentor about this alignment advocate for purposeful and values-driven planning.

The Family Business Transition

Discussing a family business scenario, Josh illustrates the complications that arise when the business isn’t large enough to support both the retiring owner and the next generation. This underscores the need for early and thorough conversations about financial expectations and realities when planning generational transitions.

The Role of a Financial Advisor

It’s important to have someone on your side who focuses on your best interests, asking critical questions that others might overlook. Josh and his team at Context Financial take this proactive approach, ensuring that clients are not only financially prepared but also personally ready for life after selling their business.

How to Connect with Josh

If you’re considering a business transition and seeking guidance, reach out via Context Financial. Start with a no-pressure conversation to explore how Josh and his team can assist in aligning business transactions with personal goals.

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