MICHAEL & LISA
CASE STUDY #1
50 & 51
Step away from their business yet still maintain the standard of living they have been accustomed to
Michael and Lisa don't know what options they have regarding how to transition their business.
They can't just walk away from their business and they aren't sure if their top leadership would be capable of taking over operations fully.
Michael would describe himself as a serial entrepreneur and wants to make sure he has enough disposable income to support a future business hobby.
The obstacle isn't overcoming a bad situation, but in understanding how to transition their current situation into a new reality that supports their lives.
So what's the challenge?
Continuing to generate six-figure incomes
Determining the best course of action in either selling to a third-party or an employee buyout
Minimizing taxes to keep more of their business equity
Sheltering their money in legally insulated vehicles
Michael and Lisa aren't in a rush to retire, but they know that the right plan can take time to execute and they want to have wise counsel in their corner.
Michael and Lisa knew they don't know what they don't know, so they sought out professional help from a financial planner and really liked the idea of working with a team-based approach since that is how they have built their business.
In this situation they will need to have business valuation specialists, business brokers, venture capital, ESOP specialists, estate planning attorneys, business transaction attorneys, and tax accountants all ready to support this exploration. They already had an accountant but asked to have the other professionals brought to the table.
When Michael and Lisa first began thinking about this, they didn't know who to turn to. Their accountant, while fantastic at accounting, didn't have an answer for them, and their current financial advisor was always more interested in discussing their insurance and investment returns. They wanted someone that would help be the quarterback to their whole financial world.
A game plan was put into place for Michael and Lisa that offered the following:
A retirement plan that showed how much money they would need overall to fund their future goals.
Multiple scenario review that offered an internal equity transition, an external buyer, as well as continuing in an ownership position with reduced work obligations.
A tax-efficient investment strategy on all three scenarios.
Charitable gifting strategies offering both donor advised funds and charitable remainder trusts.
Asset protection strategies integrating social security timing.
At the end of the process they had multiple options as well as 3, 5, and 10 years goals. Michael and Lisa have their financial world organized and a team to support them with the best path for them.
Note: the above case study is hypothetical and does not include an actual Southwestern Investment Group client. No portion of the content should be construed by a client or prospective client as a guarantee that he/she will experience the same or certain level of results or satisfaction if Southwestern Investment Group is engaged to provide investment advisory services.
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