You need a job/work to make an income to live the life you want.  How’s that working out for you? It’s time to re-evaluate!

You may have just started out and progress is slow, or maybe progress is too fast and you aren’t coping.  You may have been going a few years now but stuck in a rut, lost sight of the original plan. Or maybe you’re one of the OG’s still doing it because that’s what you’ve always done.

So lets take stock:

How much profit do you make each year – is it enough? Or could you reduce your hours to give you more me-time?

What is the value of your business? You might be surprised here.  There is definitely a market for small businesses already set up as that is the Hard Bit, especially if the business can be run from home as this means low overheads for the owner.  When you sell your business the goodwill component is tax-free so this is a great reason to get your business pumping to the maximum.

Increasing the value of your business is achieved by increasing turnover, reducing overheads. You may need to take staff on to assist with additional work, but you will reap the benefits of leveraging off their work.  Staff costs are higher than just the cost of their wages as you will include HR advisory, cost of additional assets required eg computer, phone, and possibly car; ACC levies & insurance will probably increase.

Is there a life span on your business? Is technology going to overtake what you do? Is now a good time to get out while profits can still be made by new owner?

Be aware that baby boomers are probably in the process of retiring – you don’t want to end up with your business for sale at the same time theirs all are.

Also, what is the lifespan of your clients? Are they going to all retire soon? Meaning your turnover may take a hit – although not everyone retires at the same time.  Same applies to your staff – are they all approaching retirement, are you going to find yourself looking to replace key personnel.

Can you operate your business as you get older? Is it a physical job that is now tiring? It may be good to get staff trained to assist you sooner rather than later.

Is it just time for a change? You could reinvest your proceeds of sale from your business into something else.  Or it could become part of your retirement fund, that you can invest to support yourself in your later years.

Talk with your accountant, as there could be hidden taxes on exit from your business such as depreciation recovered on sale of assets, also Retained Earnings balances that need to be paid out by way of dividends.

Plenty to think about!

If you’d like to discuss this further contact Raelene Rees at Raelene Rees Chartered Accountants www.reesaccounitng.co.nz