Established Business Owner

WHY THEY’RE LOOKING FOR HELP:

Samantha and Noah have been married for several years, and currently have three children.

They have been spending the past two decades building a business, but are now starting to think more about growing out of their business, and having more flexibility with their time.

The business currently has 15 employees, and they are feeling the pressure to retain the employees they’ve spent so much time training, while making sure their retirement plan is on track.

They’ve also been wondering whether or not they should buy out the 3rd partner in the business, as she seems to be less engaged in the day-to-day operations.

Up to this point, they haven’t saved much for retirement in the traditional sense but have a sizable asset in the form of the business, and want to better understand what this means for their financial future.

They also want to know what this means for their children’s education funding.

Lastly, they aren’t sure if or when they should sell the business, and whether or not the children will be interested in taking over the business at some point in time.

While they feel far behind from the other people in their social circle, they have done a great job fostering financial strength in the form of:

• Control over the local market for which their business operates in
• Strong cash flows from the profitability of the business
• Ability to shape benefits and saving plans to cater to both the needs of their employees, and themselves
• Living comfortably within their means

THE APPROACH:

For both Samantha and Noah, taking a step back out of the day-to-day chaos that comes with running a business is crucial. They’ve never really spent time thinking about what an ideal week, month, or year would look like to them.

Understanding the vision for the business (both short and long-term) is vital in helping them think through what they will eventually do with the business, and what the non-negotiables would be if they were in fact to sell it.

Once they have a clear hierarchy of wants and needs for their future lifestyle, a financial plan based on those wants and needs could be created.

DESIRED RESULTS:

When first starting out in the planning process, Samantha and Noah are most concerned about what to do with the business as they continue to age and what it means for their retirement.

They want to make sure after all of the years of hard work put into creating it, that there is a clear plan in place to take care of their employees, and be able to spend more time enjoying the fruits of their hard work.

Developing a comprehensive financial plan would help allow them to:

• Make changes to their current employee benefit package, to not only retain employees and reward those who have been loyal to the company, but also ensure their retirement readiness.

• In working with their CPA, explore whether part of their children’s education could be funded by hiring each of them to perform administrative roles inside of the business. This could also serve as a way to see their children work in the business, feel out if they would one day want to inherit the business, and accomplish funding their education.

• Determine whether purchasing the remaining portion of the company would prevent them from catching up on their retirement savings, or if it actually could help them create more value when looking to sell the business down the road.

• Feel confident in giving substantial raises to their top employees, and creating a career path for the tasks or roles they no longer feel interested in doing.

• Understand the value of the company, and what options they would be able to make use of when selling it to help fund their retirement.

By completing this planning process, Samantha and Noah could feel ready to take on the next stage of growth in their business, reduce the tasks and roles they need to serve in, and start living their complete dream life.

It could help them feel they can now be more intentional about how they grow the business, rather than just trying to keep up with the busy day-to-day.

Note: The above case study is hypothetical and does not involve an actual Harmony Wealth client. No portion of the content should be construed by a client or prospective client as a guarantee that they will experience the same or a certain level of results or satisfaction if Harmony Wealth is engaged to provide investment and financial planning services.