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How much is enough? A business owners guide

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So, you’re thinking of selling your business…

You’ve been in the trenches, you’ve taken risk, you’ve started, built & grown your business for what may seem like forever. But one day, it doesn’t matter when, why or how, you start thinking about getting out.

Retirement? Maybe. Less stress/more time? Usually. Greater freedom? Definitely.

Well that’s all well and good, but before you sail off into the sunset, there’s some things you need to sort out first.

Now you might be expecting me to start babbling on about business valuation methodologies, exit strategies, tax positioning, etc. but fear not, that’s not where I’m going with this.

Sure, that stuff’s important, but in my experience, here’s what matters most…

What’s the end game?

Chances are, you’ve been busy being busy,  juggling life, family, work, the whole 9 yards. If you’re like most entrepreneurs, you’ll be guilty of having your head in the sand just a little bit and not seeing the bigger picture. Your business success has provided you a nice lifestyle, status, purpose, but what is it going to give you when you sell it?

This is something you’ve got to figure out, and it ain’t easy.

Pay off the mortgage. Put the kids through private school. Uni fees. More holidays. A new Aston Martin Vantage (what a thing of beauty). Or simply, enough cash to not have to earn, work or worry about money ever again?

Either way, starting with the end in mind is critical.

How much is enough?

Of course, you want to squeeze out as much value as possible from the asset that has taken blood, sweat and tears to build – who wouldn’t?

But forget about that for a moment. Focusing on ‘as much as possible’ sounds sensible, but it can lead you astray.

Instead, step back for a minute and look at the big picture of your life and your future. You need to understand what you want from life and work back from there. That will determine how much it costs and how much you need to sell the business for.

For most people the overarching goal is ‘financial independence’.

Having enough money to afford the lifestyle you want for the rest of life. 

All well and good, but what does the lifestyle you want cost? Again, this is most definitely a question for you – maybe get your calculator out as here’s a ‘back of a fag-packet’ calculation for you:

Annual spending x  25   =   Your number

Your number is the amount of capital you need in order to achieve financial independence, give or take. Yes, there are more sophisticated ways of calculating this, but let’s not overcomplicate things.

For example: if you’d be happy with £30k per annum, plus say an extra £10k per year on holidays, your annual spending = £40,000. Multiply this by 25 and you’ve got your number (a nice around £1,000,000).

And of course, you should add the big ‘one-offs’ to your number, be it paying off the mortgage early or buying that holiday home in Spain. You can read Michael and Emma’s story of how they achieved Financial Independence by clicking here.

So, what’s your numbers?


If you’re thinking about selling your business, you’ve got to read our ‘the business owners guide to achieving financial independence’. If you would like a copy, just drop us a line and we’ll get it out to you.

All the best,

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