Mosaic Financial Partners: How to manage your business as a long-term retirement asset Featured

7:00pm EDT November 25, 2013
Sabrina Lowell, CFP®, Principal, COO, Mosaic Financial Partners Sabrina Lowell, CFP®, Principal, COO, Mosaic Financial Partners

It’s never too early to start planning your exit.

Your business may be the largest asset in your retirement portfolio, but converting it into an income resource for retirement takes planning to ensure it has value, even after you are no longer at the helm.

“It’s important to start with the end in mind. What are you trying to accomplish?” says Sabrina Lowell, CFP®, principal and COO at Mosaic Financial Partners.

Those using their business as a retirement asset need to decide if they want the business to continue independently after they retire, or if they want to sell it, she says. In either case, business owners must come up with the end game before figuring out how to get there.

Smart Business spoke with Lowell about being purposeful with business planning and recognizing how much lead time you need to accomplish your goals.

Why is it important to manage a business as a long-term asset?

If you’re looking to exit, whether through retirement or a sale, and you haven’t purposefully mapped out a plan in advance, your business may end up without as much value as you thought. Some things to consider are:

  • The health of your customer base. Is your client base aging with you? This can be a concern if there’s a sole owner, or even a few owners of a similar age.
  • Human capital. Do you have an aging set of employees? Have you been bringing in the next generation, mentoring employees as future leaders?
  • Product offerings and innovation. Are your products and/or services evolving and relevant to the current market?

What must a business owner consider when preparing for an exit?

When you’re clear about your objectives, decision-making becomes much easier. As a business owner, think about what your goals are for the business long term. The goals should be simple and concise so that they can be used to test alternative decisions that arise during the years an exit plan often takes to implement. These objectives are often qualitative, such as:

  • Sustain client service standards.
  • Take care of employees.
  • Maintain company culture and values.
  • Further the industry.

How can you keep long-term planning from falling to the bottom of a to-do list?

Be purposeful about setting time aside to say: ‘What is my vision and how am I going to implement that plan?’ on an ongoing basis. Like any transition, it’s not easy. The more you can set up systems to help support that effort, the better.

There’s no hard-and-fast rule for how much time is needed. There is usually more work on the front end, before the plan just requires maintenance. Important, but not necessarily urgent, strategic planning can often fall to the bottom of the daily ‘to-do’ list. Setting aside 30 minutes or an hour each day to focus on the business can make the process more approachable.

Where can a quality financial adviser help?

A financial adviser can help determine your number — how much you need to get out of the business for retirement. This may give you more flexibility when structuring your exit. Perhaps you get some payment upfront and an ongoing income stream, rather than just payment upfront.

Your adviser will help you discover what the transition is going to look like, and how to begin preparing. It’s always difficult to make decisions around an asset when you have a personal, emotional connection. A financial adviser has an arm’s length perspective that can help with both the numbers and personal side of a succession plan.

Sabrina Lowell, CFP®, is a principal and COO at Mosaic Financial Partners. Reach her at (415) 788-1952 or

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