Overview
If you own a business and want to plan for your financial future, you need to understand your money situation. That means figuring out how much money you’ll make from things like stocks and real estate, and how much your business is worth if you sell it. To do this, you might need help from a financial advisor or business broker.
Once you know these two numbers, you can figure out how much money you’ll need to live the way you want to. You can also decide if it’s better to sell your business or keep running it. This will help you plan for your retirement and make sure you have enough money to be financially independent.
Transcript
hi this is Byron speaking to you today
from the banks of the Bear River in
Evanston Wyoming on the western edge of
the Wyoming Utah border and I want to
talk to you today about the three key
components to financial Independence for
our business owner looking to transfer
their company to management
first is what we call an entrepreneur’s
calculation of value that’s where you
work with your CPA or another business
advisor to get a calculation of your
business value
it doesn’t need to be the highest
standard it just needs to be a represent
a reasonable range the second is a cash
flow projection that would take into
consideration the uses of your cash
which are bonus compensation Capital
expenditures and taxes and then what
would be left over to service potential
uh installment purchase debt and then
the third is the financial needs
analysis of the business owner so that
the advisors know clearly what the owner
needs in the way of resources from the
company in order for them to become
financially independent
so we use those three
points in the financial planning process
to get clarity on what the business is
worth what cash flow could be available
to service debt and more importantly
what resources does the business owner
need from the company in order for them
to be financially independent from it
when they retire
